Taiwan–US chipmaking deal sees $250B investment as TSMC expands manufacturing

They would like to bring manufacturing back into the United States under Trump administration, and they want it. And that has also been the case in past governments, often with the carrot method to sweeten the deal. Similarly, Trump (left) has taken the stick as his preferred alternative to . imposing tariffs, it forces firms to move operations into the United States through its use of paraphrasingr. A new trade deal has been struck recently between the US and Taiwan. During this deal, Taiwan will invest $250 billion in the US as part of its chipmaking efforts to make chips.

Taiwan brings chipmaking to US in $250 billion deal

During the agreement between both countries, Taiwan is expected to invest at least $250 billion in chipmaking for chips making on US-based processors as part of the deal. The US has subsequently agreed to reduce its reciprocal tariffs on Taiwan from 20% to 15% in exchange for the same, “respective” Chinese counterpart. Similarly, it will have to pay no reciprocal rates for the same product (the products and ingredients, aircraft components, natural resources) of generic pharmaceuticals and their ingredients.

Commerce Secretary Howard Lutnick told CNBC’s Brian Sullivan that TSMC bought land and is likely to open up shop in Arizona as part of this deal, “I will be buying it.” paraphrasing ‘They just bought hundreds of acres next to their property. I’m going to let them go through with their board and give them time. , ” and.

Part of the bigger picture

TSMC isn’t the first company to move some of its production facilities to the US, that said. When Trump announced the tariffs last year, TSMC said it plans to expand operations in the US next year. The TSMC joins other non-US companies such as Samsung, which also participate in building more facilities stateside. If this move would allow TSMC to skirt around the import tariffs, it would have continued to depend on other countries by making such an impact.

It won’t be just for TSMC’s advantage, but also other companies in Taiwan will benefit from this new trade deal. But if you think that the world’s largest semiconductor manufacturer is TSMC, of course, it would be better for them to gain as well.

That is good for TSMC, but that’s not the best thing about it for customers of TCMC’s. A last month report claims that TSMC’s US facilities could not produce what companies like Apple, Qualcomm and NVIDIA are demanding. However, Taiwan’s laws limit how advanced overseas operations can be operated because of the restrictions on what is considered to be a foreign operation.

While TSMC may make some chips in the US, it might not be its new chips, this means that while “TSCM” is making some of these chips. And another factor to consider is that building in the US will cost more money, too, as does . The reason for this is that companies have to spend time setting up shop. Also, they have to pay local labor wages for s. All of this is a more expensive product than all of these.

So, while TSMC might be able to skirt around tariffs, its customers might end up paying the price.

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