Trump unexpectedly says TSMC 'spending US$300 billion in Arizona'

Taipei, Aug. 6 (CNA) U.S. President Donald Trump suggested Tuesday (U.S. time) that Taiwan Semiconductor Manufacturing Company (TSMC) could invest US$300 billion in Arizona, which, if true, would be nearly double the total investment TSMC has announced to date in the United States.

"We have the biggest in the world [...] from Taiwan is coming over and spending 300 billion dollars in Arizona building the biggest plant in the world for chips and semiconductors," Trump said in an interview on CNBC's financial talk show "Squawk Box."

Trump also said new tariffs on semiconductors and chips would be unveiled "within the next week or so" -- calling them a separate category because the U.S. wants those products made domestically.

TSMC declined to respond to media inquiries about Trump's remarks on Wednesday morning, but said any related comments would be made through official company statements.

Following Trump's remarks, TSMC's American depositary receipts fell 2.73 percent to close at US$232.47 and the company's shares on the Taiwan Stock Exchange (TWSE) dropped NT$25 (US$0.84) to NT$1,125 during early trading Wednesday, down 2.17 percent.

With TSMC the largest company in Taiwan in terms of market capitalization, the share drop pulled the weighted index down by about 201 points and erased NT$648.3 billion from the market.

Trump's comment attracted attention in Taiwan because of the tariff situation it faces.

Unlike its main competitors Japan and South Korea, which are being hit with 15 percent tariffs by the U.S., Taiwan faces tariffs of 20 percent on goods imported into the U.S.

There has been speculation that Taiwan will have to pledge a huge amount of investment in the U.S. to bring that tariff rate down, with Economic Affairs Minister Kuo Jyh-huei (郭智輝) suggesting Monday in a meeting with business representatives that the figure could be as high as US$400 billion.

In March, TSMC announced it would "expand its investment in the United States to US$165 billion to power the future of AI" by increasing its U.S.-bound investment by US$100 billion.

Its original US$65 billion in investment was to build three chip fabrication plants, while the additional investment would be put into three new fabs, two advanced packaging facilities and a research and development center, according to a news release from the company.

The Hsinchu-based firm said the move was expected to drive more than US$200 billion of "indirect economic output in Arizona and across the United States in the next decade."

In May, however, it wrote a letter to the U.S. Department of Commerce warning that the tariff policy could backfire.

"New import restrictions could jeopardize current U.S. leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the U.S., including TSMC Arizona's significant investment plan in Phoenix," the chipmaker wrote on May 5.

At an investor briefing in July, TSMC Chairman and CEO C.C. Wei (魏哲家) said the company's second Arizona fab had finished construction and will use 3 nanometer (nm) process technology, while additional planned fabs will adopt 2 nm, A16, and more advanced technologies based on customer demand.

He added that TSMC is expanding its Arizona site into an advanced semiconductor manufacturing base, with about 30 percent of the company's 2 nm and "even more advanced" process technologies expected to come from the U.S.