The Trump administration signed a deal worth $250 billion with Taiwan, in a move designed to help the United States boost domestic semiconductor manufacturing. This deal was announced by the U.S. Department of Commerce on Thursday.
Under this deal, Taiwanese semiconductor and tech companies have agreed to make direct investments into the U.S. semiconductor industry. According to a press release, these investments will span across semiconductors, energy, and AI “production and innovation”. Currently, Taiwan produces more than half of the world’s semiconductors.
Taiwan will also supply an additional $250 billion in credit guarantees for additional investments from these semiconductors and tech enterprises, according to the commerce department. The timeline for the investments is unclear.
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In return for the investment, the U.S. will invest in Taiwan’s semiconductor, defense, AI, telecommunications, and biotech industries. The amount for this investment was not specified.
This news comes the day after the Trump administration published a proclamation reiterating the country’s goal to bring more semiconductor manufacturing back to the United States.
“This dependence on foreign supply chains is a significant economic and national security risk,” the proclamation stated. “Given the foundational role that semiconductors play in the modern economy and national defense, a disruption of import-reliant supply chains could strain the United States’ industrial and military capabilities.”
The proclamation also announced 25% of tariffs on some advanced AI chips. It also stated that once trade talks with other countries–like this deal with Taiwan–are complete, there would be additional semiconductor tariffs.
In 2025, Trump has made semiconductor manufacturing a central focus of his economic agenda, aiming to reduce U.S. reliance on foreign chip production and bring manufacturing back to American soil.
His administration has proposed aggressive trade measures, including a potential 100% tariff on imported semiconductors. However, companies that commit to building manufacturing capacity in the U.S. could be exempt according to previous reports.
In March last year, Taiwan Semiconductor Manufacturing (TSMC) announced plans to invest $100 billion into bolstering chip manufacturing in the U.S.
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Semiconductors are the foundational components of modern technology. They power computing systems in products ranging from smartphones and automobiles to telecommunications equipment and military weapons.
According to a press release from the U.S. Department of Commerce, the U.S. share of global wafer fabrication declined sharply from 37 percent in 1990 to less than 10 percent in 2024. Today, most semiconductors are fabricated in East Asia due to foreign industrial policies.