TSMC’s $100 bil. US investment plan weighs on Samsung, SK
Taiwanese chipmaker TSMC’s huge investment plan in the U.S. is adding more pressure on Samsung Electronics and SK hynix to follow suit, amid U.S. President Donald Trump’s increasing threats of tariffs and other economic disadvantages to its trade partners.
TSMC made the decision to invest an additional $100 billion in the U.S. state of Arizona over the next four years, despite the lack of U.S. government subsidies, for the largest-ever investment in the country by an individual foreign company. The $100 billion investment builds on the $65 billion that TSMC already committed to constructing three factories there.
Korean companies have been forced to choose between “make in America” or “pay the price,” as the Taiwanese chipmaker’s latest decision reinforced Trump’s belief that tariffs are better than his predecessor’s method of offering subsidies, in terms of attracting foreign investments.
“Now you’re seeing the power of Donald Trump’s presidency, because TSMC, the greatest manufacturer of chips in the world, is coming to America with a $100 billion investment. And, of course, that is backed by the fact that they can come here because they can avoid paying tariffs,” U.S. Commerce Secretary Howard Lutnick said during a press conference at the White House, Monday (local time).
Trump, who attended the press conference with TSMC CEO C.C. Wei, even related the Taiwanese firm’s investment plan to national security. When asked whether this project could minimize the impact on the U.S. should China try to isolate or take Taiwan, Trump said any such attempts would be a “catastrophic event,” but added it would give the U.S. a more advantageous position.
His remarks added pressure on Korean chipmakers as well, as he already floated a plan to impose tariffs of more than 25 percent for semiconductor products and implied reducing subsidies for companies operating in his country. It is even said that he may link the investment with security issues and ask the Korean government to pay more for the stationing of the U.S. Forces Korea.
In compliance with the CHIPS and Science Act, the previous U.S. government promised in December to offer $4.75 billion to Samsung Electronics for its $37 billion investment plan and $458 million to SK hynix for its $3.87 billion investment plan.
Last month, SK Group Chairman Chey Tae-won called for Washington to offer greater incentives for Korean businesses that are considering additional investments in the U.S.
Taiwanese news outlets expressed concerns about Trump’s statements, which fell short of offering security guarantees, likening TSMC’s investment to the Budapest Memorandum on Security Assurances, signed by Ukraine in 1994 to assure its territorial integrity and political independence on the condition of relinquishing its nuclear weapons. The memo is considered to have made it easier for Russia to invade Ukraine in 2022.
Source: KOREATIMES
