Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona.
“New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce.
TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s administration, which launched an investigation under Section 232 of the Trade Expansion Act of 1962.
Photo: An Rong Xu, Bloomberg
TSMC on Thursday confirmed that TSMC Arizona Corp, its US subsidiary, made the comments in the letter dated May 5, but it declined to elaborate on the letter’s contents.
Taipei and Taiwanese companies have been reluctant to voice criticism of the Trump administration’s chaotic tariff rollout, but the TSMC letter made the case that going through with the levies would have negative consequences.
TSMC said in the letter that any import measures adopted by the US government “should not create uncertainties for existing semiconductor investments,” referring to its large investments in Arizona.
TSMC is investing US$65 billion to build three advanced wafer fabs in Arizona. The first facility has begun mass-producing chips, while construction of the second fab is nearly complete and a groundbreaking ceremony was held for the third plant last month.
In March, TSMC pledged an additional US$100 billion of investment in Arizona to build three more wafer fabs, two packaging and testing plants and a research-and-development center to bring the total investment to US$165 billion.
The successful and timely completion of its Arizona project depended on the company’s expectation of growing demand for its production manufacturing capacity and services from its leading US customers, TSMC said in the letter.
However, “tariffs that raise the cost of end consumer products will lower demand for such products and the semiconductor components they contain,” the chipmaker said.
“Therefore, TSMC respectfully requests that any remedial import measures imposed resulting from this investigation not extend to downstream end products and semi-finished products containing semiconductors,” it said.
In terms of quantity and quality, a considerable amount of imported semiconductor manufacturing equipment and materials are not currently available in the US market, it said.
Any project designed to accelerate the development of semiconductor production clusters in the US, such as its Arizona plan, would be critical to creating the demand necessary for further supply chain investments and producing more equipment and materials domestically in the US, the company said.
“At a minimum, any tariffs or other import restrictions should be imposed with realistic adjustment times for TSMC Arizona and other US businesses and investors who have already committed to substantial US semiconductor production,” it said.
“This would include ensuring continued tariff-free access to inputs where local sourcing is unavailable or unfeasible or will take time to onshore, particularly from longstanding suppliers within the ecosystem,” it added.
After its project is fully online, TSMC Arizona is expected to roll out 100,000 wafers a month, “making it a GIGAFAB cluster,” it said.
Arizona would eventually account for about 30 percent of the company’s total global capacity of sophisticated 2-nanometer process and more advanced technology nodes, TSMC said.
Trump has threatened to impose tariffs of up to 100 percent on semiconductors from Taiwan, repeatedly claiming Taipei “stole” the chip business from Washington.
Although the Trump administration has said it was negotiating dozens of deals with countries threatened with high tariffs, it has since said it did not have the capacity to complete such deals and would therefore simply tell trading partners the tariff rates applied to their goods.
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