TSMC's $100 Billion U.S. Investment Squeeze Margins Amid Trump Pressure

TSM-0.06%
According to CNBC, TSMC announced a $100 billion investment into advanced semiconductor manufacturing and packaging facilities in the U.S. last week, bringing total commitments to the country to $200 billion since President Donald Trump returned to power in 2025. However, the aggressive U.S. expansion is increasing production costs and squeezing the world's leading chipmaker's profit margins. TSMC's CFO Wendell Huang said on an earnings call that gross margin gains in the second quarter were offset by dilution from overseas fabs, with margins expected to be further diluted over the next several years as projects ramp up. The company forecasts gross margin dilution of 2% to 3% in early stages, widening to 3% to 4% later. Analysts estimate TSMC's U.S.-made chips cost 20-50% more than those produced in Taiwan.
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