Trump's push for American-made AI chips hits TSMC's margins
TSMC is facing margin pressure due to the high costs of expanding manufacturing operations in the United States under pressure from the Trump administration. Despite record profits, the company's overseas investments are creating financial headwinds.
Why it matters
This illustrates the tension between geopolitical industrial policy and the operational efficiency of global supply chains.
Pressure from President Donald Trump to manufacture advanced semiconductors in the U.S. is increasing costs and squeezing margins at Taiwan Semiconductor Manufacturing Co. , the world's leading chipmaker.
Following Trump's return to power in 2025, the president has repeatedly threatened tariffs on companies that don't make their products in America.
Since then, TSMC has announced a total of $200 billion in commitments to the country, including last week's unveiling of a $100 billion investment into advanced semiconductor manufacturing and packaging facilities in the U.S.
While buoyed by the artificial intelligence boom — TSMC's market cap has risen more than 100% in the past 12 months — blockbuster earnings this quarter were hit by overseas expansion, the company said.
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