Taiwan Semiconductor Manufacturing Co's new investment will come on top of their existing commitments, and will go into "building five cutting edge fabrication facilities," Trump said during a White House event, flanked by TSMC chief executive C.C. Wei

He added that much of the funding would be invested in the US state of Arizona, where TSMC -- the world's largest chipmaker -- has already invested heavily, and would create "many thousands" of high-paying jobs.

TSMC has long faced demands to move more of its production away from Taiwan, amid fears that supplies of the critical technology could be disrupted in any conflict with Beijing.

The company, during former president Joe Biden's administration, pledged to invest more than $65 billion in three factories in Arizona, one of which began production in late 2024.

Trump recently ratcheted up the pressure on TSMC and other chip manufacturers by publicly mulling the introduction of 25 percent tariffs on all semiconductor chips made outside the United States.

Taiwan said it will review the investment "in accordance with the law".

The review will take into account "the company's development while ensuring the overall competitiveness of the semiconductor industry and the country," cabinet spokeswoman Michelle Lee said.

Taiwan Premier Cho Jung-tai said the island looked forward to "continuing to cooperate with friendly countries for mutual benefits".

But he said it was important that Taiwan maintain its "key position" in the global chip supply chain and "ensure that we are leading in key technologies".

Taiwan's Department of Investment Review spokesman Su Chi-yen told AFP the government could potentially veto the investment, but that "most past rejections were due to incomplete documentation."

Monday's announcement brings the total amount committed by TSMC to around $165 billion, C.C. Wei said Monday.

"We are going to produce many chips to support AI progress, and to support smartphones' progress," he added.

The new investment will help expand the firm's US footprint to include "three new fabrication plants, two advanced packaging facilities and a major R&D (research and development) team center," while supporting 40,000 construction jobs over the next four years, TSMC said in a statement.

The concentration of chip manufacturing in Taiwan has been described as a "silicon shield" against a possible invasion or blockade by China, which claims the island as part of its territory and has threatened to use force to bring it under its control.

There are concerns Taiwan could lose that protection if its companies build too many factories overseas.

"Taking away Taiwan's technology sector will reduce the power of Taiwan's 'silicon shield'," James Yifan Chen, assistant professor in the Department of Diplomacy and International Relations at Tamkang University in Taiwan.

"Taiwan without semiconductor and tech industries will be like Ukraine without nuclear weapons."

- Tariff threats -

Since regaining the White House, Trump has called on companies to create more manufacturing jobs in the United States, while threatening to impose steep levies on those who do not comply.

His administration has already imposed a 10 percent tariff on Chinese goods, and is scheduled to impose a 25 percent tariff Canada and Mexico from Tuesday, alongside an additional levy of 10 percent on goods from China.

On Monday, Trump said there was "no room left for Mexico or for Canada" to avoid the tariffs, adding: "They're all set, they go into effect tomorrow."

Trump has invited executives from some of the world's largest companies -- including OpenAI and Oracle -- to the White House since his January 20 inauguration to tout investments worth hundreds of billions of dollars in US manufacturing.

The amount announced since inauguration day now totals more than $1 trillion, including a commitment from Apple to invest $500 billion over the next four years.

These gargantuan sums are sure to please Trump's supporters. His critics point to some similarly ambitious targets pledged during his first term in office which failed to materialize.

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