Washington spent four years trying to convince the world's most important chipmaker to build in America.
On Thursday, July 16, it got a positive answer.
Taiwan Semiconductor Manufacturing Company (TSM) confirmed an additional $100 billion for its Arizona operations.
That lifted its total US commitment to $265 billion, which is the largest foreign direct investment in the country's history.
However, investors did something strange in response to the news. They sold TSM.
For investors, that difference between the national win and the market reaction is worth assessing.
The White House and the Commerce Department announced the $100 billion increase on Thursday, saying it will fund four additional advanced facilities.
That will bring TSMC's American footprint to 12 advanced semiconductor and packaging plants.
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The inclusion of packaging plants matters as much as the fabrication plants.
Advanced packaging is the step that stacks a processor beside high-bandwidth memory so the two can move data fast enough to run large AI models.
Until now, that final step has happened almost entirely in Asia.
However, building both fabs and packaging plants in Phoenix means a Nvidia (NVDA) or Apple (AAPL) chip could be made one day from start to finish on American soil.
The new plants will use 2-nanometer technology and below, which is TSMC's most advanced production process.
That detail is crucial because it indicates that America is no longer getting last-generation chips as a consolation prize.
The TSMC commitment sits on top of a trade framework reached between the US and Taiwan in January.
According to CNBC, Taiwanese chip and technology firms pledged at least $250 billion of direct US investment.
Taipei's government also added another $250 billion in credit guarantees.
In return, Washington capped its reciprocal tariff on Taiwanese goods at 15%, down from the 20% Trump had imposed and well below the 32% first announced.
Reuters reported that the final agreement was signed in February, adding that Taiwan's schedule for cutting tariffs on nearly all American goods was included.
The effort paid off. Commerce Secretary Howard Lutnick has said Taiwanese chip firms that decline to build in the US risk a 100% tariff.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
