Taiwan and the US have signed a trade agreement that will see Taiwanese semiconductor and technology companies invest at least $250 billion in chip production capacity in the United States.

According to the United States Secretary of Commerce Howard Lutnick, in addition to the $250bn direct commitment from tech companies, under the terms of the deal, the Taiwanese government will also provide credit guarantees of at least $250 billion to further expand the semiconductor supply chain in the US.

No timeline for the investment has been disclosed. As a result of the agreement, the US government will lower the tariff rate applied to goods from Taiwan to no more than 15 percent, down from 20 percent.

The deal will also allow Taiwanese companies building new US semiconductor capacity to import up to 2.5 times that planned capacity without paying the necessary tariffs during the approved construction period, with a lower preferential tariff rate for above-quota imports.

Furthermore, Taiwanese companies that have completed new chip production projects in the United States will still be able to import 1.5 times their new US production capacity without paying the relevant tariffs.

The two countries also intend to establish “world-class industrial parks” in the US to “strengthen America’s industrial infrastructure and position the United States as the global center for next-generation technology, advanced manufacturing, and innovation,” the Department of Commerce said in a statement.

"We're going to have hundreds of companies coming here. We're going to build giant semiconductor industrial parks in America, and we are going to bring semiconductors home,” Lutnick said.

US gov’t anticipating further TSMC investment

In an interview with CNBC announcing the trade agreement, Lutnick said that the $100bn already announced by TSMC counts towards the $250bn commitment, but he expects to see a further increase in the company’s investment in the US – “possibly doubling in size in America.”

Earlier this month, TSMC announced it had purchased 900 acres of land in Phoenix, Arizona, during an Arizona State Land Department auction on January 7. The land parcel is located near Loop 303 and Interstate 17, close to the company’s existing site.

Following the publication of its Q4 2025 results this week, the chipmaker said it was speeding up its capacity expansion in Arizona and pulling forward the production schedule at its second fab in the state, with high volume manufacturing now expected for the second half of 2027.

“Construction of our third fab has already started, and we are in the process of applying for permits to begin the construction of our fourth fab and fourth advanced packaging fab. Furthermore, we have just completed the purchase of a second large piece of land nearby to support our current expansion plan and provide more flexibility in response to the very strong multi-year AI-related demand,” chairman C.C. Wei said on a call with analysts.

Lutnick’s prediction about future TSMC investments come a week after he made comments on the All-In podcast indicating that the US government had reached a new agreement with TSMC that would see the chipmaker increase its investment in the States in return for the Trump administration waiving the fines incurred by the company for violating diversity, equity, and conclusion-related clauses included its original US CHIPS and Science Act agreement.

“What we did is, we said to TSMC, look, you signed the contract. There are 20 pages of DEI stuff. You need to hire staff. Oh, you have to hire a blind contractor. You have to have, like, you know, trans lesbian engineers. I’m not kidding, by the way.

“You didn’t build a daycare center in the middle of your clean room fab. Like, you signed that contract, so you’re in breach. Okay, so how about this? How about add $100 billion? So instead of building $60 billion, you build $160 billion. And we agreed, so I feel better.”

When asked by the host if that meant the government had waived the DEI requirements, Lutnick said “of course,” adding, “build another $100 billion. We can rip that stuff up, no problem.”