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Taiwan Anticipates Minimal Impact from Trump’s Tariffs on Chip Exports

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Taiwan does not expect significant disruption to its semiconductor exports from tariffs proposed by U.S. President-elect Donald Trump, according to Economy Minister Kuo Jyh-huei. The island, home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), is a pivotal player in the global tech supply chain, supplying companies like Apple and Nvidia.

While Taiwanese officials acknowledge that U.S. tariffs could negatively affect overall economic growth in Taiwan—an export-dependent economy—Kuo emphasized that Taiwan’s semiconductor sector would largely be shielded from these changes. He pointed out that Taiwan’s technological edge in semiconductor manufacturing gives it an advantage that cannot easily be replicated, limiting the impact of any potential tariffs.

Trump has pledged to impose a blanket 10% tariff on all global imports, along with higher tariffs specifically targeting Chinese goods. He also committed to a 25% tariff on imports from Canada and Mexico upon taking office on January 20.

In response to these developments, Taiwan plans to assist companies in relocating supply chains to the United States, helping mitigate the impact of tariffs by shifting operations where necessary. Kuo also highlighted efforts to foster growth in Taiwan’s aerospace sector, suggesting that some of the island’s aerospace research and development centers could relocate to the U.S. Additionally, Taiwan plans to open an office in Japan by mid-2025 to facilitate investments and collaboration on artificial intelligence (AI) and drone technology.

 

TSMC’s Q4 Revenue Exceeds Expectations, Boosted by AI Demand

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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, reported a strong performance in the fourth quarter of 2024, with revenue significantly surpassing market forecasts, driven by robust demand for artificial intelligence (AI) products. TSMC’s customers, including major tech firms like Apple and Nvidia, have been key players in the AI revolution, which has helped offset the slowdown in chip demand for consumer electronics like tablets following the pandemic.

For the October-December period, TSMC posted revenue of T$868.42 billion ($26.36 billion), a 34.4% year-on-year increase, exceeding the expected T$853.57 billion ($25.90 billion) according to analysts surveyed by LSEG SmartEstimate. This marks a significant jump from the $19.62 billion revenue recorded during the same period in 2023.

TSMC had previously forecasted fourth-quarter revenue to fall between $26.1 billion and $26.9 billion, which it successfully met within its guidance range. For December alone, the company reported a 57.8% year-on-year revenue increase, reaching T$278.16 billion.

This positive performance reflects the growing demand for semiconductors used in AI applications, with other Taiwanese firms, such as Foxconn, also reporting strong earnings in the fourth quarter due to the AI boom. TSMC is scheduled to announce its full fourth-quarter earnings on January 16, where it will provide an updated outlook for the current quarter and the full year.

The company’s stock rose 81% in 2024, far outpacing the broader market’s 28.5% gain, though it closed flat on Friday ahead of the revenue release.

 

TSMC Begins Production of Advanced 4-Nanometer Chips in Arizona

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Taiwan Semiconductor Manufacturing Co (TSMC) has officially started producing advanced four-nanometer chips at its Arizona facility, marking a significant milestone in the U.S. semiconductor industry. U.S. Commerce Secretary Gina Raimondo revealed the news, calling it a historic achievement for the United States, which now manufactures cutting-edge chips on American soil for the first time.

This breakthrough follows TSMC’s $6.6 billion grant from the U.S. Department of Commerce to bolster semiconductor production in Phoenix, Arizona. Raimondo emphasized the importance of this development, noting that the chips produced are on par with Taiwan’s high-quality standards in both yield and performance. She highlighted the achievement as one that many doubted could happen, marking a critical moment in the U.S. push for domestic semiconductor production.

TSMC, the world’s leading contract chipmaker and a key supplier for tech giants like Apple and Nvidia, has yet to publicly comment on the start of production. However, this move comes after TSMC’s agreement in April to significantly expand its Arizona operations. The company plans to invest an additional $40 billion, bringing its total investment to $65 billion, and will build a third fabrication plant by 2030.

This production milestone is part of the broader $52.7 billion U.S. initiative to boost semiconductor manufacturing and research within the country. Raimondo revealed that convincing TSMC to expand its U.S. plans was no easy feat, and significant negotiations were required.

Looking ahead, TSMC intends to produce even more advanced chips, including two-nanometer technology, at its second Arizona fab, scheduled for 2028. By then, the company plans to use its most advanced “A16” chip manufacturing technology in the U.S. as part of this expansion. The U.S. government has also supported TSMC’s efforts with up to $5 billion in low-interest loans.

Raimondo’s goal is for the U.S. to produce 20% of the world’s leading-edge logic chips by 2030, a dramatic increase from its current share of zero. TSMC expects to begin high-volume production in its first U.S. fab by the first half of 2025.

Additionally, in a related development, the Commerce Department awarded $407 million to support Amkor Technology’s $2 billion advanced semiconductor packaging facility in Arizona. This facility, set to be the largest of its kind in the U.S., will focus on packaging and testing chips for industries such as autonomous vehicles, 5G/6G, and data centers, with Apple expected to be its first major customer.