The Trump administration is close to a trade deal with Taiwan that would lower American tariffs on goods from the self-governed island and significantly expand Taiwan Semiconductor Manufacturing Co’s (TSMC) planned investment in chip production on US soil, according to people familiar with the matter.

Duties on Taiwanese imports would fall to 15% from the current level of 20%, according to one of the people. That level would put the Taiwan shipments on a par with those from Japan and South Korea, which reached their own agreements last year.

Under the deal taking shape, TSMC would pledge to build at least four more chip manufacturing plants in Arizona, adding to the six factories and two advanced packaging facilities it has already promised to open there, the person said.

The commitments would add to existing plans for as much as US$165 billion (RM669.24 billion) in US investment by TSMC, the world’s top producer of advanced chips used in artificial intelligence and a company that has come under increasing attention in Washington because Taiwan faces military aggression from China.With the cost of building a single fab upwards of US$20 billion, TSMC’s additional investment would likely approach or surpass US$100 billion. The four extra fabs would be completed in the 2030s.

Trump administration officials including Commerce Secretary Howard Lutnick had laid out their expectations for Taiwan to promise significant additional investments by TSMC in chip production on US soil. Any agreement with Taipei risks provoking China, which claims the island as part of its territory — a view Taiwan rejects.

Taiwan has been trying to conclude a deal with the US before Trump meets Chinese leader Xi Jinping in China, according to a senior official in Taipei who declined to be identified discussing the sensitive issue. The US leader is expected to visit China in April.

Source: Theedgemalaysia