Taiwan Semiconductor Gains Government Support, Faces Trump's Tariff Threats, Cheaper Chinese Rivals

Contract chipmaker Taiwan Semiconductor Manufacturing Co TSM can soon heave a sigh of relief as Taiwan’s government promised to consider possible support for the domestic industry over tariff threats by U.S. President Donald Trump, Reuters cites Premier Cho Jung-tai Wednesday.

Taiwan will weigh additional cooperative plans and assistance programs to resolve the tariff woes.

Also this week, the Taiwan economy ministry told Reuters that the semiconductor business between Taiwan and the U.S. is a mutually beneficial model for both sides given the high level of interconnectivity of the semiconductor ecosystem.

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Trump had verbally attacked Taiwan during his campaign days, flagging the lack of a defense agreement between the countries. He alleged the island of undermining the U.S. chip industry.

Additionally, the U.S. tech sector got a jolt from the emergence of Chinese artificial intelligence upstart DeepSeek, which said it could build AI models rivaling OpenAI at a fraction of the cost.

Home to Taiwan Semiconductor, a key contract chipmaker, the island is a key link in the supply chain for companies like Apple Inc AAPL and Nvidia Corp NVDA.

Trump continued his MAGA rhetoric threatening to impose tariffs on imported chips, pharmaceuticals, and steel.

The chipmaker’s total U.S. investment now stands at $65 billion.

Taiwan Semiconductor earmarked fiscal 2025 capex of $38 billion—$42 billion versus fiscal 2024 capex of $29.8 billion. Taiwan’s trade surplus with the U.S. surged 83% in 2024, with exports to the U.S. reaching $111.4 billion.

Taiwan Semiconductor chief C.C. Wei called the U.S. sanctions “manageable.”

Taiwan Semiconductor surged over 73% in the last 12 months. Investors can gain exposure to the stock through Avantis Emerging Markets Equity ETF AVEM and Capital Group Global Growth Equity ETF CGGO.

Price Action: TSM stock traded higher by 1.67% to $205.78 at the last check on Wednesday.

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