The US Department of Commerce is considering imposing tariffs on imported semiconductors, prompting Taiwan Semiconductor Manufacturing Company (TSM) to caution that such measures could drastically reduce demand for its clients' electronic products. This could disrupt TSM's significant $165 billion investment project in Arizona, which includes the construction of six wafer fabs, two advanced packaging plants, and a research center.
TSMC conveyed in a letter to the US Bureau of Industry and Security that declining market demand from key American clients might decrease their need for TSM's manufacturing capabilities and onshore services. This reduction in demand and related manufacturing uncertainties could delay construction and operations in Arizona, impacting TSM's financial ability to execute the project on time.
The letter further indicated that tariffs might lead to higher end-consumer product prices, reducing demand for products containing semiconductors. TSM encouraged the US government to avoid implementing tariffs or other restrictive measures on semiconductors manufactured outside the US. Companies like Dell (DELL) and Hewlett Packard Enterprise (HPE) reportedly support the concerns raised by TSM.
