On March 4, the Taiwan Semiconductor Manufacturing Corporation (TSMC) announced an additional $100 billion investment to expand its semiconductor chips manufacturing in the United States, focused in the state of Arizona. Expanding on its initial $65 billion investment towards manufacturing operations in the northern Phoenix area, the new TSMC deal breaks the record as the single largest foreign direct investment in US history and is slated to bring thousands of jobs into the US.
The announcement was made at a joint press conference featuring TSMC CEO C.C. Wei, US President Donald J. Trump, Secretary of Commerce Howard Lutnick, and White House czar for AI and cryptocurrency David Sacks. The multi-billion dollar investment will stretch across a four-year period to primarily fund three additional semiconductor fabrication plants, or fabs, two packing plants, and a research and development (R&D) facility.
By 2030, Arizona is expected to have a total of six fab facilities, with TSMC’s investment projected to bring in a whopping $200 billion in indirect economic output in Arizona and create tens of thousands of construction and high-tech manufacturing jobs. “TSMC is doubling down on its investment with an expansion in Phoenix. [This is a] testament to the US semiconductor industry growth that will deliver a major win for American workers,” Phoenix Mayor Kate Gallego told the Arizona Commerce Authority. “This expansion energizes innovation that fosters more economic growth, opportunities for skilled workers, and positions the Phoenix region at the forefront of advanced manufacturing.”
According to TSMC’s press release announcing the new deal, the additional facilities will “play a crucial role in strengthening the US semiconductor ecosystem” and “complete the domestic AI supply chain with TSMC’s first US advanced packaging investments.” Given that TSMC supplies about 90% of the world’s semiconductor chips, the company’s major investment comes as a welcome development for American manufacturing as the United States seeks to reestablish itself as a major global chip producer.
The rising demand for TSMC’s semiconductor chips makes the Taiwanese company’s recent pivot to the United States a key opportunity for job growth and local economic development in Arizona. After being courted by Arizona officials to invest in the state, TSMC’s US investment in Arizona has jumped from an initial $12 billion investment in a Phoenix fab in 2020, to over $65 billion in 2024 to construct two more fabs, and most recently to the $100 billion deal. Once construction is completed by around 2030, Arizona will be able to produce, package, and test millions of chips that will be used in technology ranging from autonomous vehicles to Apple devices. In January 2025, the US Department of Commerce announced that TSMC’s first Arizona fab commenced production of advanced four-nanometer chips for American customers.
The current investments are expected to create about 6,000 direct manufacturing jobs and 20,000 cumulative construction jobs to help build the new facilities, which are slated to finish by the end of the decade. TSMC estimates that its total investment will culminate in around $32.9 billion in total economic output and create $4.6 billion in personal income. TSMC’s commitment to expanding its operations in Arizona not only bodes well for the local economy in the short term but also revives a previously dormant industry, provides a new career avenue for Arizonans to pursue, and fosters greater partnership between Taiwan and Arizona.
Simultaneous with TSMC’s investments, Taiwan and Arizona have also taken recent measures to strengthen their bilateral relationship. Since 2017, trade between the two has increased by 220% and was valued at around $4.8 billion in 2024. In 2023, Arizona opened a trade and investment office in Taiwan to increase economic collaboration and foreign investment.
Most recently, on March 15, Arizona Governor Katie Hobbs visited Taiwan where she met with Taiwanese President Lai Ching-te, TSMC executives, and other business leaders from major Taiwanese tech companies to reaffirm ties between Taiwan and the state’s high-tech manufacturing industry. During their meeting, President Lai and Governor Hobbs underscored their commitment to building a new “non-red” supply chain that would rely less on Chinese suppliers while still producing the same quality and quantity of chips demanded. “I’m thrilled by Arizona’s emergence as America’s hub for advanced manufacturing, creating hundreds of thousands of good-paying jobs and bringing billions of dollars of investment into our state,” stated Governor Hobbs in a press release prior to her trip. “Arizona is the best place in the world to do business, and I look forward to delivering that message to industry leaders in Taiwan.”
The new $165 billion investment looks to break new ground for American manufacturing and further develop the symbiotic relationship between Arizona and Taiwan when it comes to emerging technologies. “[The March 4] announcement builds on years of bipartisan collaboration between Arizona’s federal, state, and local leaders and our economic development teams to make our state the best place in the country to build these one-of-a-kind facilities.”, said Arizona Senator Mark Kelly. “By boosting domestic microchip development and production, we’re reducing reliance on foreign supply chains and making sure America leads the way in the industries of the future.”
Lois Ramilo is a Spring Young Professional at the East West Center in Washington. She is a recent graduate from the University of California, San Diego where she majored in international relations.