Catenaa, Friday, January 16, 2026- The US and Taiwan reached a trade deal on Thursday under which Taiwanese companies will invest $250 billion to boost production of semiconductors, energy, and AI in the US.
The agreement includes $100 billion already committed by semiconductor giant TSMC in 2025, with more to come, according to US Commerce Secretary Howard Lutnick.
TSMC, the world’s largest contract chipmaker, hinted at plans to build more manufacturing capacity in the US during its January 15 earnings call, but did not elaborate on any additional investment beyond the $165 billion it has already committed.
In exchange, the US will limit “reciprocal” tariffs on Taiwan to 15%, down from 20%, and commit to zero reciprocal tariffs on generic pharmaceuticals, their ingredients, aircraft components, and some natural resources.
TSMC has bought land and could expand in Arizona as part of this deal, Commerce Secretary Howard Lutnick told CNBC on Thursday.
“They just bought hundreds of acres adjacent to their property,” Lutnick said. “I’ll let them go through with their board and give them time.”
“Regarding TSMC’s plans, the market demand for our advanced technology is very strong. We continue to invest in Taiwan and expand overseas; all the investment decisions are based on market conditions and customer demands,” a TSMC spokesperson told CNBC.
The announcement added that future tariffs under the Section 232 framework will have some exceptions for companies that are building chips in the US.
Taiwanese companies constructing new US chip fabs, such as TSMC, will be able to import up to 2.5 times the amount of capacity they are building while the factories are under construction, without paying tariffs under the framework.
When the factories are completed, companies will be able to import 1.5 times their US production capacity, Commerce said.
