An NYT report says the U.S. is close to completing a trade deal with Taiwan, where TSMC is based.
- The report said the trade deal would include commitments from TSMC to invest more in setting up fabs in the U.S.
- TSMC is the world’s biggest contract chip manufacturer and a key vendor to Nvidia and Apple.
- The Taiwanese giant already has one fab in the U.S. and is building four more.
U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. gained 0.2% in early premarket on Tuesday amid reports that the U.S. is close to completing a trade deal with Taiwan.
The New York Times reported on Monday that the deal involves the U.S. lowering tariffs on the island nation to 15% – in line with the rates on Japan and South Korea – and commitments from TSMC to invest significantly more in the U.S.
TSM stock had gained 2.5% on Monday, bringing its year-to-date gains to over 9%; shares gained 54% over 2025. On Stocktwits, the retail sentiment shifted to ‘bullish’ as of early Tuesday, from ‘neutral’ the prior day.
Complicated Geopolitical Situation
TSMC is the world’s largest contract chip manufacturer and a key vendor to Nvidia and Apple. Given its unique position, any disruption in its business or trade pipeline has ripple effects across the world and sectors, such as electronics, cars, and weaponry – as was seen during the COVID-19 pandemic.
Meanwhile, Taiwan’s autonomy is another issue of concern for businesses and lawmakers. Beijing has long asserted that Taiwan belongs to China and should one day be brought under Chinese control. China recently conducted live-fire drills around the island, raising the possibility of an invasion.
In fact, China has reportedly advised European countries not to host Taiwanese officials, citing European Union laws and regulations, according to a Guardian report.
The nexus is further complicated by the U.S. and China’s push to outpace each other in AI capabilities. Under the Joe Biden administration, the U.S. banned exports of advanced chips to China, while a more recent on-again, off-again stance on certain China-approved chips has added uncertainty – particularly for Nvidia.
US-Taiwan Deal Details
As part of the reported U.S.-Taiwan trade deal, TSMC would commit to building at least five more semiconductor facilities, or fabs, in Arizona, roughly doubling the number of plants it has in the state, sources told the NYT.
The company opened its first fab in 2020 and is working on a second one that would open in 2028. It had promised to build four more in the coming years, but as part of the U.S.-Taiwanese trade talks, it agreed to add at least five more.
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