Taiwan has committed to driving hundreds of billions of dollars of extra investment into America’s chip industry as part of a US trade deal announced on Thursday, with the island’s biggest semiconductor producer already moving to buy more land in the US state of Arizona.

Taiwan Semiconductor Manufacturing Company (TSMC) – the world’s largest contract chipmaker – confirmed on Thursday that it had bought a second tract of land in Arizona. The 365-hectare (901-acre) plot nearly doubles the company’s footprint in the southern US state, according to local media reports.

The company – which pledged last year to invest an additional US$100 billion in the United States – will build at least five new semiconductor facilities in America as part of the newly announced trade deal, The New York Times reported, citing sources familiar with the matter.

The trade deal, announced by the US Department of Commerce on Thursday, will see America cut Taiwan’s baseline tariff rate from 20 per cent to 15 per cent, bringing the duties in line with those imposed on Japan and South Korea.

In return, Taiwan has pledged that its technology companies will invest US$250 billion in the US, with the Taiwanese government providing another US$250 billion of credit guarantees to help its firms create a “full semiconductor supply chain” in America.

TSMC’s chairman and chief executive, C C Wei, said on Thursday that the company had “finished a purchase” of a second tranche of land in Arizona to “scale up an independent gigafab cluster”.