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Former U.S. President Donald Trump announced a $165 billion investment deal with Taiwan Semiconductor Manufacturing Company (TSMC) on Monday, March 3, at the White House. The deal is expected to bolster the U.S. semiconductor industry, create thousands of jobs, and enhance the country’s technological standing.

“The most powerful AI chips in the world will be made right here in America,” Trump stated during the announcement.

TSMC, one of the world’s largest chip manufacturers, is a key supplier for major companies including Intel, Apple, and Nvidia. The agreement aims to strengthen U.S. influence in the semiconductor sector while also reinforcing national security.

Expansion Plans in Arizona

Although TSMC primarily operates overseas, it has an existing presence in Arizona. Trump confirmed that TSMC’s CEO plans to expand operations in the state, with construction set to begin on five state-of-the-art factories dedicated to producing advanced AI chips.

“Semiconductors are the backbone of the 21st-century economy, and really, without semiconductors, there is no economy,” Trump added.

Tariffs Influence Business Decisions

Commerce Secretary Howard Lutnick explained that while the initial investment discussions began under the Biden administration, Trump’s tariffs have played a crucial role in making the U.S. a more attractive location for companies like TSMC.

“They want to be in the greatest market in the world, and they want to avoid the tariffs. If they are not here, they have to suffer,” Lutnick stated.

Federal Workforce Reduction

Despite the substantial investment in semiconductor manufacturing, Bloomberg reports that the U.S. Chips Program Office, established under the 2022 Chips Act to support domestic semiconductor production, is undergoing downsizing. The office, which employed 140 personnel under the Biden administration, is expected to see a 40% reduction in staff as part of Trump’s broader federal workforce reduction efforts.

The announcement comes just days after Apple revealed its own $500 billion investment to expand U.S. facilities over the next four years, underscoring a broader trend of increased domestic technology investment.

The TSMC deal is set to significantly impact the U.S. semiconductor landscape, boosting innovation and strengthening the nation’s position in global technology markets.