Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) stock gained on Monday amid renewed geopolitical and supply chain discussions, as the United States intensifies its efforts to onshore semiconductor production.
As a vital chip supplier for tech giants like Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL), TSM remains at the center of a strategic global realignment in the semiconductor industry.
Washington’s Push for Domestic Production
U.S. Commerce Secretary Howard Lutnick told NewsNation that Washington has engaged in discussions with Taipei to mitigate the risks of over-reliance on a single geographic location for advanced chip manufacturing.
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The push is part of a broader American strategy to secure half of its semiconductor needs from domestic production, a significant policy shift.
According to a Bloomberg report from Monday, Lutnick contends that producing 50% of America’s semiconductor needs domestically is the only effective way to counter Beijing’s threat of invading Taiwan.
TSM’s U.S. Expansion and Profitability
TSM has made notable progress in its U.S. expansion. Its Arizona operations became profitable in 2025, posting a $150.1 million net profit after four years of losses, driven by a surge in demand and factory utilization.
The facility, which supplies major customers including Apple, Nvidia, and Advanced Micro Devices (NASDAQ: AMD), commenced mass production of 4-nanometer (nm) chips in late 2023 and is preparing to scale up its 3-nm output.
The company’s U.S. footprint is set to expand further with plans for four more fabs and 2-nm mass production by 2028.
This aggressive build-out is underscored by a recent partnership with longtime client MediaTek, which will adopt TSM’s 2-nm process for a flagship chip slated for a 2025 production start and 2026 launch.
Long-Term Strategy and Vulnerability
Washington has consistently voiced concerns that its dependence on TSM’s intricate supplier network leaves the nation vulnerable.
The COVID-era shortages served as a stark reminder of just how critical semiconductors are to a wide array of industries, from automaking to defense and artificial intelligence.
While TSM has committed a massive $165 billion to bolster its U.S. production capacity, achieving large-scale domestic manufacturing will require not only this considerable investment but also the relocation of its extensive supplier ecosystem.
The Wall Street Journal reported last week that Washington is contemplating a “broader plan to reduce reliance on overseas semiconductors,” signaling a long-term strategic pivot.
Price Action: TSM stock was trading higher by 0.74% to $275.40 premarket at last check Monday.
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