How TSMC's investment in U.S. chip industry is a big win for President Trump

With an “America First” focus on domestic manufacturing and job creation, U.S. President, Donald Trump appears to have scored a big deal in the global race for leadership in semiconductor technology.

A significant $100 billion deal with TSMC announced last week, means that the U.S. could potentially diversify its chip supply and reduce dependence on overseas sources. The deal will see TSMC establish five advanced chip factories in the U.S. in the coming years, likely in Arizona, where TSMC already has a plant in progress.

In case you don't know, TSMC is a Taiwanese semiconductor company and the world's largest contract chipmaker, cranking out chips for giants like Apple, NVIDIA, and AMD.

For years, the U.S. has relied way too much on Asia (think Taiwan and South Korea) to produce up to 90% of its chips, according to CLSA – and Trump has always been big about stimulating local production of technology equipment. Recall that Trump has always pushed for the banning or blacklisting of Chinese equipment and chip companies, citing security concerns.

This TSMC deal seems to be the U.S. government's initial steps away from Chinese technology.

From a national security perspective, having domestic chip production could also mean greater control over the technology used in defence systems. It’s also worth noting that China is also aiming to become a major player in chip manufacturing, so this deal could be seen as part of a broader tech competition.

The $100 billion figure is a significant investment, and it's not just about the chips themselves. It's projected to create a substantial number of high-tech jobs. This could have a positive impact on local economies and potentially drive further innovation in areas like AI, 5G, and autonomous vehicles.

From a political angle, this deal aligns with the “America First” focus on domestic manufacturing and job creation that's been a key part of Trump’s platform. Interestingly, strengthening domestic chip production is an area where there seems to be bipartisan agreement in Washington.

With the TSMC deal, it would potentially boost U.S. chip manufacturing capabilities, address concerns about supply chain security and national security, and impact the world's economic and political landscape.

All in all, it bodes well for the U.S in the global race for leadership in semiconductor technology.