Taiwan Semiconductor Manufacturing Co. (TSM) expects the U.S. government funds that it has been promised under the CHIPS and Science Act to continue under President Donald Trump.
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TSMC, as the company is popularly known, has been promised $6.6 billion under the CHIPS Act to help build three microchip fabrication plants in Arizona. The billions in government funding is part of U.S. efforts to relocate the manufacturing of microchips and semiconductors to America.
While Trump has made comments about canceling the funding that was awarded under his predecessor Joe Biden, TSMC says that it is confident the Trump administration will continue funding its U.S. fabrication plants. Speaking to CNBC, TSMC Chief Financial Officer (CFO) Wendell Huang said the funding is expected to continue under Trump as the fabrication plants reach major milestones.
Made in America Chips
To date, TSMC says it has received $1.50 billion in government funds for its U.S. chip fabrication plants. The company’s first fabrication plant in Arizona has already begun producing advanced microchips, said Huang. He added that the second fabrication plant is expected to be operational in 2028.
In all, TSMC’s total investment in its three U.S. fabrication plants is expected to total $65 billion. The Biden administration signed the CHIPS and Science Act in August 2022, committing $53 billion to invest in the domestic semiconductor supply chain in an effort to counter China in the sector.
Record Profits
During his 2024 election campaign, Trump criticized the CHIPS Act and its price tag, arguing that tariffs were a more effective strategy to onshore chip manufacturing. But analysts have said that they expect Trump to leave the policy mostly intact due to its necessity.
TSMC recently reported record profits for the fourth quarter of 2024 as demand for the artificial intelligence (AI) chips that it makes skyrockets. The stock of TSMC has gained nearly 90% over the last 12 months, leading gains among most microchip and semiconductor stocks.
Is TSM Stock a Buy?
The stock of Taiwan Semiconductor Manufacturing Co. has a consensus Strong Buy rating among five Wall Street analysts. That rating is based on four Buy and one Hold recommendations assigned in the last three months. The average TSM price target of $240.60 implies 13.76% upside from current levels.
