*

TSMC plans $100 billion investment in United States

*

CEO announces the plan during meeting with Trump

*

Investment will include new chip factories

*

TSMC shares decline as investors weigh higher US costs

(Adds TSMC share reaction, Taiwan government comments in

paragraph 7 and 13)

By David Shepardson and Steve Holland

WASHINGTON, March 3 (Reuters) - Taiwanese semiconductor

company TSMC plans to make a fresh $100 billion investment in

the U.S. that would involve building five additional chip

facilities in the country in coming years, its CEO announced

with President Donald Trump on Monday.

Taiwan Semiconductor Manufacturing Co ( TSM ), the world's

largest contract chipmaker and a leading supplier to major U.S.

hardware manufacturers, announced the plan as its CEO C.C. Wei

met with Trump at the White House.

"We must be able to build the chips and semiconductors that

we need right here," Trump said. "It's a matter of national

security for us."

TSMC said the expansion includes plans for three new chip

fabrication plants, two advanced packaging facilities and a

major research and development center.

The $100 billion outlay, which would boost domestic production

and make the United States less reliant on semiconductors made

in Asia, is in addition to an investment announced last April,

when TSMC said it would expand its planned U.S. investment by

$25 billion to $65 billion and add a third Arizona factory by

2030.

TSMC did not give a timeframe for any of its new investments,

other than saying it would create 40,000 construction jobs over

the next four years. Construction on its first Arizona plant was

plagued by delays, with the company eventually starting chip

production in 2024 at a higher cost than at its facilities in

Taiwan.

The company's Taiwan-listed shares opened down 2.25% on Tuesday

and were trading about 1.5% lower at 0413 GMT.

"Higher costs are definitely a concern for TSMC," said

Andrew Tsai, chairman of Taiwan's Capital Investment Management

Corp, an investment consulting firm.

As a key manufacturing partner to Nvidia ( NVDA ), Qualcomm ( QCOM )

and Advanced Micro Devices ( AMD ), TSMC is central to

the U.S. chip industry, and bringing more of its production to

U.S. soil would solve a major supply chain risk for those firms

The Taiwanese company could also play a central role in saving

rival Intel ( INTC ). Earlier this year, Trump administration

officials met with Wei in New York about taking a majority stake

in a joint venture in Intel's ( INTC ) factory unit, as part of a deal in

which several chip firms would take a stake in the venture,

according to a source familiar with the matter. Intel ( INTC ) did not

respond to questions about the meetings.

For Trump, the announcement helps show voters he is

fulfilling his campaign pledge to do more to bolster domestic

industries and create jobs.

It is the latest in a string of such developments. In February,

Apple said it would invest $500 billion in the next four years,

although much of that was routine spending. Emirati billionaire

Hussain Sajwani and SoftBank also have promised multi-billion

dollar investments in the U.S.

TSMC said on Monday it looks "forward to discussing our

shared vision for innovation and growth in the semiconductor

industry, as well as exploring ways to bolster the technology

sector along with our customers."

Taiwan's cabinet said on Tuesday that it would review the

investment in accordance with its laws, which require government

approval for any large overseas investment by a Taiwanese

company.

Taiwan Premier Cho Jung-tai said the government generally viewed

overseas investments that would raise Taiwan's overall

competitiveness positively and that Taiwan was a "most

important" partner to the U.S. in high-tech sectors.

CHIPS ACT

The first Trump administration brought TSMC to Arizona in

2019 and introduced legislation that would later become the

CHIPS and Science Act, passed in 2022 under President Joe Biden

to provide $52.7 billion in subsidies for American semiconductor

production and research.

Last year, the U.S. Commerce Department finalized a $6.6 billion

government subsidy for TSMC to produce semiconductors in

Phoenix, Arizona, while the $100 billion announced on Monday

would be eligible for a 25% manufacturing investment tax credit

under the 2022 law.

Under Biden, the Commerce Department convinced all five

leading-edge global semiconductor firms to locate factories in

the U.S. as it sought to address national security risks from

imported chips.

Taiwan's dominant position as a maker of chips used in

technology from cellphones and cars to fighter jets has sparked

concerns of over-reliance on the island, especially as China

ramps up pressure to assert its sovereignty claims.

China claims Taiwan as its territory, but the democratically

elected government in Taipei rejects Beijing's sovereignty

claims.

Commerce Secretary Howard Lutnick said on Monday that TSMC and

other companies were investing in the U.S. as they sought to

avoid Trump's new tariffs.

Lutnick told lawmakers in January that the Biden-era program was

"an excellent down payment" to rebuild the sector, but he has

declined to commit to grants that were approved by the

department under Biden, saying he wanted to "read them and

analyze them and understand them."

A TSMC spokesperson said last month the company had received

$1.5 billion in CHIPS Act money before the new administration

came in, as per the milestone terms of its agreement.

TSMC last year agreed to produce the world's most advanced

2-nanometer technology at its second Arizona factory, expected

to begin production in 2028. TSMC also agreed to use its most

advanced chip manufacturing technology called "A16" in Arizona.

TSMC has already begun producing advanced 4-nanometer chips for

U.S. customers in Arizona.