'Build plant here, or pay 100% tax': Trump's ultimatum to chipmaker TSMC

Donald Trump's latest threat comes as chip giant TSMC faces a potential $1 billion fine over a US export control probe linked to its chips ending up in a Huawei AI processor

US President Donald Trump on Tuesday (local time) said that he has asked Taiwan Semiconductor Manufacturing Company (TSMC), the biggest contract chipmaker in the world, to build their plant in the US or end up paying ‘big tax’ of up to 100 per cent.

 

“TSMC, I gave them no money ... all I did was say, if you don’t build your plant here, you’re going to pay a big tax,” Trump said, while speaking at a Republican National Congressional Committee event in Washington.

 

Trump’s ‘I gave them no money’ jab was targeted at former president Joe Biden administration's $6.6 billion grant to TSMC to establish its production in Phoenix, Arizona. “...semiconductor companies don’t need the money,” Trump said.

 

 

On April 8, during an event at the National Republican Congressional Committee, #Trump said he told the #Taiwan Semiconductor Manufacturing Company it would pay a tax of up to 100 percent if it didn't build its plants in the United States. #TSMC pic.twitter.com/sbV8WR3qP0

— 鳳凰衛視PhoenixTV (@PhoenixTVHK) April 9, 2025

 

TSMC’s investment assurance 

Meanwhile, in March 2025, the Taiwanese chipmaker said that it plans to invest $100 billion in chip-making plants in the US over the next four years because of the ‘strong customer demand’.

 

The move sparked concerns in Taiwan after which its president, Lai Ching-te, assured the people by saying that TSMC’s decision is necessary for its future development and the government did not face pressure from the US during TSMC’s investment process in the US.

 

A ‘billion dollar fine’ looming? 

Trump’s most recent threat to the company also comes hours after Reuters reported, citing sources, that the chip making giant could face a fine of $1 billion or more against a US export control investigation relating to its chip ending up in a Huawei AI processor.

 

The catch: Last year, the US Department of Commerce started investigating TSMC’s work for China-based Sophgo, after one of the chips it designed was found in Huawei's high-end Ascend 910B artificial intelligence processor.

 

The US had restricted Huawei, a Chinese tech giant, from buying the technology, accusing it of sanctions busting and trade secret theft, reported Reuters.