Trump's push for American-made AI chips hits TSMC's margins
Pressure from President Donald Trump to manufacture advanced semiconductors in the U.S. is increasing costs and squeezing margins at TSMC, the world's leading chipmaker. Since Trump returned to power in 2025, TSMC has announced $200 billion in U.S. manufacturing commitments, including a recent $100 billion investment in Arizona facilities. While TSMC reported a 77.4% jump in second-quarter profit driven by AI demand, CFO Wendell Huang said overseas expansion is diluting gross margins by 2-4% over the next several years. Analysts estimate TSMC's U.S. chips cost 20-50% more than those made in Taiwan. The company is reportedly raising prices by up to 10% in 2027, with customers expected to absorb most of the higher costs due to TSMC's market dominance. The White House credits Trump's trade and economic policies for driving the investments.
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