The US Tariff wars might be heating up, but former President Donald Trump isn’t just targeting China. He’s going straight for the chipmakers.

At a recent Republican  event, Trump said he warned Taiwan Semiconductor Manufacturing Company (TSMC) to build factories in the US or face heavy import taxes—up to 100%. That’s not a suggestion, it’s a threat, and it comes at a time when the US is battling to regain control over its chip supply chain.

Political pressure and AI race:

Trump’s comments highlight a bigger issue—AI and chipmaking are now political footballs. With the AI race speeding up, chips are the fuel. And with companies like Nvidia, AMD, and Apple relying on TSMC, the pressure to bring more of that manufacturing to the US is real.

At the same time, countries are watching each other. China wants self-reliance, the US wants dominance, and Taiwan—home to TSMC—sits right in the middle.

As AI gets more powerful, expect this tug-of-war over silicon to get louder.

Trouble brews over Huawei chip link:

At the same time, TSMC might be staring at a billion-dollar penalty. Reuters reports that the US Commerce Department could fine the company over $1 billion for unknowingly supplying compute chiplets to China’s Huawei. These chips were allegedly used in Huawei’s Ascend 910-series AI processors.

The US export laws allow for fines of up to double the value of unauthorised sales. According to the report, TSMC hasn’t received formal charges yet, but if proven, it could be one of the largest tech penalties ever.

Back in 2023, Seagate was fined $300 million for selling hard drives worth $1.1 billion to Huawei. If TSMC is hit with a similar charge, it could further complicate the already tense US-China tech standoff.

TSMC’s Golden visa application:

Despite Trump’s claim, TSMC has already promised to invest heavily in the US. In March 2025, the world’s largest contract chipmaker announced a $100 billion plan to build five new factories in the country. One of them is already under construction in Phoenix, Arizona.

The US wants more semiconductor manufacturing on home soil, especially after COVID exposed just how fragile the global chip supply chain can be. With AI, electric cars, defence systems, and smartphones all powered by chips, control over this tech has become a national security issue.

As reported by Reuters, Trump criticised the Biden administration’s decision to offer TSMC a $6.6 billion subsidy for its Arizona plant, claiming the chip giant didn’t need handouts. “TSMC, I gave them no money … all I did was say, if you don’t build your plant here, you’re going to pay a big tax,” Trump said at the Republican National Congressional Committee event.

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