TSMC Could Lose Billions If It Fails to Expand on U.S. Soil

TSMC’s earnings for Q1 ’25 have shown strong revenue performance. But, these numbers could take a hit if the firm doesn’t establish manufacturing operations on U.S. soil soon.

TSMC’s Q1 Earnings Look Strong, But U.S’ Tariff Threat Puts the Firm in a Tight Spot

TSMC released a statement ahead of its full quarterly earnings report, scheduled for April 17, with “higher-than-forecast” revenue numbers, thanks to strong demand for AI products, particularly with NVIDIA being a key customer. With a 42% quarterly increase, the company reported revenue of nearly T$839.3 billion, which translates to roughly $25.6 billion.

While President Trump’s tariffs don’t include semiconductors (at least for now), TSMC’s shares still took a noticeable hit last week. Like many other companies, they plummeted. But it may not all be bad news for the company, per se. In March, TSMC had announced plans to invest close to $100 billion in building three fabs, an R&D centre, and a packaging facility on U.S. soil.

This week, however, Trump has warned that if TSMC doesn’t expand into the United States, it could face close to 100% tariffs. This is something that puts the world’s most advanced chipmaker in a tight spot. See, with TSMC’s major advanced manufacturing facilities concentrated in its home country, Taiwan, it sits at the heart of what’s called the “silicon shield,” against China.

Beijing sees Taiwan as part of its territory, and with TSMC’s key role in the global tech supply chain, manufacturing chips for companies like Apple, NVIDIA, and Qualcomm, it’s somewhat of a strategic asset to these firms.

TSMC’s dominance in the chipmaking segment is a major factor in its democratic allies having a strong interest in protecting Taiwan’s independence. However, if TSMC moves too much of its production overseas, it could essentially risk losing this “protection” as well.