Taiwan Semiconductor Touts $1.5 Billion In US Subsidies, Confident Trump Will Maintain CHIPS Act Backing

Contract chipmaker Taiwan Semiconductor Manufacturing Co TSM expressed conviction in the Donald Trump administration’s commitment to bolstering the country’s semiconductor position by funding the construction of chipmaker facilities under the CHIPS Act.

Previously, Trump had verbally attacked Taiwan for not having a defense treaty with the U.S. and for allegedly undermining his country’s chip industry. He also expressed his disapproval of the CHIPS Act.

Taiwan Semiconductor CFO Wendell Huang told CNBC the U.S. chip subsidies will likely continue under Trump as the fabrication plants pass construction and production milestones. 

Also Read: Western Digital Faces ‘Challenging Pricing Environment,’ But There’s Long-Term Potential: Analysts

The chipmaker told CNBC that it had bagged $1.5 billion in subsidies from the U.S.

Taiwan Semiconductor’s Huang told CNBC that its first fabrication plant in Arizona started producing advanced chips in the fourth quarter of 2024 after production delays. He said that the construction of two plants in Arizona was on track, with the second likely operational in 2028.

Taiwan Semiconductor’s investment in its three Arizona projects is worth over $65 billion.

However, industry experts have told CNBC that they expect Trump to keep the policy intact due to its bipartisan support in Washington. 

Last week, Taiwan Semiconductor chief C.C. Wei dismissed concerns over U.S. semiconductor sanctions, calling them “manageable.” He also flagged the company’s focus on advanced packaging and stated that non-AI sectors like automotive and crypto-mining remain unaffected by sanctions.

Taiwan Semiconductor reported fourth-quarter revenue growth of 38.8%, reaching $26.88 billion, topping the analyst estimate of $26.28 billion.

The gross margins expanded by 600 bps to 59% as its 3-nm and 5-nm technologies gained traction.

It expects first-quarter 2025 revenue of $25.0 billion—$25.8 billion, in line with the $24.97 billion analyst consensus and a gross margin of 57%—59%. The company committed $38 billion—$42 billion to fiscal 2025 capex versus actual capex of $29.8 billion a year ago. 

Taiwan Semiconductor stock surged over 87% in the last 12 months.

Investors can gain exposure to companies’ stocks engaged in the manufacturing of semiconductors through VanEck Semiconductor ETF SMH and iShares Semiconductor ETF SOXX.

Price Action: TSM stock traded higher by 0.93% to $213.47 premarket at the last check on Tuesday.

Also Read:

• Nvidia Continues Strong Demand for Taiwan Semiconductor’s Advanced Packaging Despite Technology Shifts

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