The US and Taiwan agreed to a long-sought trade pact that would lower tariffs on goods from the self-governed island to 15% and see Taiwanese semiconductor companies increase financing for American operations by $500 billion.
Under the terms, which the Trump administration announced Thursday, duties on Taiwanese shipments would fall from the previous 20% rate — putting them on par with Japan and South Korea, which reached their own deals last year.
Taiwan’s technology industry would also commit to making at least $250 billion in direct investments to expand advanced semiconductor, energy and artificial intelligence operations in the US. That includes a previous commitment of around $100 billion by Taiwan Semiconductor Manufacturing Co., Commerce Secretary Howard Lutnick said. In addition, Taiwan agreed to provide an additional $250 billion in credit guarantees for further investment in the American semiconductor supply chain.
A US Commerce Department statement outlining the deal did not specifically mention TSMC, but the arrangement has clear implications for the company, which is the world’s top producer of AI chips. Lutnick said in an interview with CNBC that he expected the company “to come in huge, bigger — you’ve seen reports on possibly doubling in size.”
Bloomberg reported earlier this week that the accord would call for TSMC to build at least four more chip manufacturing plants in Arizona, adding to the six factories and two advanced packaging facilities it has already promised to open there.
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