Trump stunned the tech world on April 8, 2025, declaring he told Taiwan Semiconductor Manufacturing Company (TSMC) it would face a tax of up to 100% if it doesn’t build factories in the United States. Speaking at a Republican National Congressional Committee event, the President doubled down on his push to bring semiconductor production stateside, slamming the Biden administration’s $6.6 billion grant to TSMC’s U.S. unit as unnecessary. With TSMC already pledging $100 billion for U.S. plants, this bold ultimatum raises the stakes in a high-stakes game of trade, technology, and national security. Let’s unpack what this means for TSMC, the U.S. economy, and the global chip supply chain.

Table of Contents

1. Trump’s Ultimatum to TSMC: A Game-Changer Unveiled
2. Why Trump Is Targeting TSMC
3. TSMC’s $100 Billion U.S. Investment Plan
4. The Biden Grant Trump Rejects
5. Implications for the Semiconductor Industry
6. Global Reactions and Market Shocks
7. What’s Next for Trump and TSMC?

Trump’s Ultimatum to TSMC: A Game-Changer Unveiled

Trump dropped a bombshell at the RNCC event, saying, “TSMC, I gave them no money… all I did was say, if you don’t build your plant here, you’re going to pay a big tax—25, maybe 50, maybe 75, maybe 100%.” This isn’t just rhetoric; it’s a direct challenge to TSMC, the world’s leading contract chipmaker, which powers tech giants like Apple and Nvidia. The statement, made on April 8, 2025, comes as TSMC navigates a complex web of U.S. investments and looming tariffs.

The timing is critical. Just a day later, on April 9, China retaliated with 84% tariffs on U.S. goods, escalating a trade war Trump ignited with his reciprocal tariff policy. TSMC, caught in the crossfire, declined to comment, but the stakes couldn’t be higher for a company that dominates 90% of the world’s advanced chip production.

Why Trump Is Targeting TSMC

Trump’s focus on TSMC isn’t random—it’s strategic. Semiconductors are the lifeblood of modern economies, driving everything from smartphones to AI. The U.S., once a chip-making powerhouse, now relies heavily on Asia, particularly Taiwan, where TSMC is based. Trump sees this as a national security risk, especially with China’s claims over Taiwan threatening global supply chains.

He’s long accused Taiwan of “stealing” the U.S. chip industry, a sentiment he reiterated in 2024 campaign talks with Joe Rogan. His solution? Force companies like TSMC to build in America through punitive tariffs, not subsidies. “They’ve got nothing but money,” he said of chip firms, dismissing Biden’s grant approach. This aligns with his broader agenda to revive U.S. manufacturing, a promise that resonated with voters and fueled his return to the White House.

TSMC’s $100 Billion U.S. Investment Plan

TSMC isn’t starting from scratch. In March 2025, its CEO, C.C. Wei, stood beside Trump at the White House, announcing a $100 billion investment to build five new U.S. factories, mostly in Arizona. This builds on a $65 billion commitment from 2024, bringing TSMC’s total U.S. stake to $165 billion. The plan includes three fabrication plants, two packaging facilities, and an R&D center, promising 20,000-25,000 jobs.

The first Arizona plant kicked off 4-nanometer chip production in 2024, with a second slated for 2028 and a third by 2030, targeting even smaller 2nm chips. Trump hailed it as “the most powerful AI chips made right here in America,” but his latest tax threat suggests he wants more—and faster. Posts on X from tech watchers speculate this pressure could accelerate TSMC’s timeline or force a rethink of its Taiwan-centric production.

The Biden Grant Trump Rejects

Trump’s disdain for the $6.6 billion grant to TSMC’s Phoenix operation is a key flashpoint. Awarded under Biden’s CHIPS and Science Act in November 2024, the funds aimed to bolster U.S. chip-making after TSMC’s initial $12 billion Arizona pledge in 2020. The Act, a bipartisan effort Trump claims credit for initiating, has funneled $32.5 billion to 32 companies, including TSMC.

But Trump calls it “ridiculous,” arguing rich chip firms don’t need handouts—just threats. “They’re coming here because they want to avoid the tariffs,” Commerce Secretary Howard Lutnick echoed on March 3, crediting Trump’s hardball tactics over Biden’s incentives. The clash highlights a policy divide: subsidies versus tariffs, with TSMC caught in the middle.

Implications for the Semiconductor Industry

Trump’s 100% tax threat could reshape the chip landscape. For TSMC, it’s a double-edged sword. Building in the U.S. dodges tariffs but hikes costs—its Arizona plants are pricier than Taiwan’s due to labor and delays. A Reuters report on April 8 also flagged a potential $1 billion fine for TSMC over a Huawei chip export issue, adding pressure.

For the U.S., it’s a win if TSMC ramps up domestic output, reducing reliance on Asia. But analysts warn of risks: higher chip prices, supply chain disruptions, and a possible TSMC monopoly if it snaps up competitors like Intel Foundry. Globally, Taiwan’s “silicon shield”—its chip dominance deterring Chinese aggression—could weaken, shifting geopolitical dynamics.

Global Reactions and Market Shocks

The fallout was swift. Taiwan’s stock market tanked, with TSMC shares flat after a 10% drop earlier in the week. China’s 84% tariff salvo on April 9 wiped $5 trillion off S&P 500 firms, per Times Live. Taiwan countered with a $15 billion stabilization fund and offered the U.S. zero tariffs and more investment, hoping to negotiate Trump down.

X posts reflected the chaos: “Trump’s turning TSMC into a U.S. vassal,” one user quipped, while another warned, “This trade war’s gonna spike GPU prices.” The uncertainty has tech firms and investors on edge, with TSMC’s U.S.-listed shares dipping over 4% on March 3, per Yahoo Finance.

What’s Next for Trump and TSMC?

Trump’s not bluffing—he’s already slapped 10% tariffs on 180+ countries, with China at 104%. TSMC’s $100 billion pledge might not shield it if he deems progress too slow. On April 9, Taiwan’s government vowed its most advanced tech stays home, hinting at limits to Trump’s demands. Negotiations loom, but Trump’s track record—think John Deere’s 200% tariff threat—suggests he’ll push hard.

For more on this unfolding saga, check Reuters. As of April 9, 2025, Trump’s tax ultimatum to TSMC is a high-stakes gamble—will it secure U.S. chip supremacy or spark a global tech crisis? Only time will tell.