U.S. and Taiwan Sign $250B Deal to Boost U.S. Chip Production

The United States and Taiwan have formally signed a trade agreement that will drive at least $250 billion in new direct investment into the U.S. semiconductor sector, alongside another $250 billion in credit guarantees. The deal is aimed at expanding domestic chip manufacturing and reducing reliance on East Asian supply chains that support everything from iPhones to AI data centers.



Under the agreement, Taiwanese tech firms will invest heavily to build and expand facilities for advanced semiconductors and AI infrastructure within the United States. Taiwan is also backing the initiative with another $250 billion in credit guarantees to facilitate additional investment and help companies get established stateside. The plan includes the development of new industrial parks intended to house this expanded manufacturing ecosystem.


This influx of capital tracks with recent moves by Apple's primary chip partner, TSMC. The foundry just confirmed it is accelerating construction at its Arizona plant to meet the spike in demand for AI silicon. It also supports the broader supply chain Apple needs to build chips domestically, as partners like Chang Chun Group and Sunlit Chemical have already set up operations in Arizona to supply the necessary chemicals and materials.

To make the financials work for these companies, the deal establishes a predictable tariff structure. Reciprocal tariffs on Taiwanese goods will be capped at 15 percent, while specific items like aircraft components will see zero tariffs. The U.S. is also using future Section 232 duties as leverage to encourage construction. Taiwanese chipmakers that invest in American facilities will be allowed to import significantly more volume duty-free—up to 2.5 times their planned capacity during construction and 1.5 times their output once production is running.

The Commerce Department says the U.S. share of global wafer fabrication has slid from 37 percent in 1990 to under 10 percent today, leaving the country dependent on foreign manufacturers. This agreement aims to reverse that trend, following other recent domestic efforts like Apple's move to begin shipping AI servers from a new facility in Houston.

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