President Trump has predicted the US will control over 50% of the chip industry by the end of his term. The administration's ambition represents a staggering shift, considering domestic semiconductor production currently sits at roughly 2% of global output.
Commerce Secretary Howard Lutnick has set a more modest operational target of 40%. The plan rests on active negotiations with Taiwan, the global heavyweight of advanced chip manufacturing, to relocate substantial production capacity to US soil. Taiwan has resisted fully relocating its strategic assets.
In January 2026, the administration signed a proclamation imposing 25% tariffs on advanced computing chips. The White House is also looking to adjust the CHIPS and Science Act subsidies, potentially using tariffs as a complement or substitute for direct incentive funding.
A cutting-edge fabrication facility typically requires three to five years to build, and East Asian dominance stems from decades of cost-efficient overseas manufacturing. For investors, US-based manufacturers like Intel could benefit from tariff protection. Conversely, companies like NVIDIA, which designs domestically but relies on TSMC for fabrication, may face margin squeezes.
TSMC is already constructing facilities in Arizona, but scaling to meet the administration’s ambitions would require massive capital shifts, as building in the US is significantly more expensive due to higher labor costs and less established supplier ecosystems.