President Trump, joined by TSMC CEO C.C. Wei at the White House, announced the Taiwanese chipmaker will be investing at least $100 billion in new capital in the US for five new fabs.
TSMC could avoid up to 25% tariffs with the US investments, Trump said, and touted the benefit of tariffs.
Referring to foreign companies that have stolen US jobs for decades, Trump said, "They cannot come in and steal our jobs and not expect to be punished."
TSMC is likely to build new fabs in Arizona with the funds. It already has been producing early versions of chips for Apple at a fab in the Phoenix area. TSMC has already been spending up to $65 billion for fabs in the US and was promised $6.6 billion under the US CHIPS Act during the Biden administration.
Commerce Secretary Howard Lutnick credited the tariffs, saying TSMC is coming the US "because they can avoid paying tariffs." He said the Biden administration got $65 billion of TSCM investment in the US by promising $6.6 billion, while the Trump administration got $100 billion from TSMC with the threat of tariffs.
Trump made the announcement with Wei and also said tariffs of 25% on Canada and Mexico will take effect Tuesday, with an added 10% on goods from China.
Economists widely expect the the new tariffs will raise costs on items like cars by $3,000 per vehicle. As a result of the expected impact on prices, markets declined severely with the president's comments shortly before 3 ET on Monday. The Dow Jones Average dropped 750 points on the day.
Nvidia shares dropped 9% while Marvell shares dropped 7% shortly before market close.