On a day when stocks were falling broadly in response to President Donald Trump's imposition of new tariffs on Canada, Mexico, and China, Taiwan Semiconductor Manufacturing (TSM 2.35%) was one of the rare stocks posting gains.

Yesterday's announcement at the White House that the company planned to invest an additional $100 billion in new chip foundries in the U.S. seemed to be lifting the stock today. As of 10:15 a.m. ET, TSMC was up 2.1%. It had gained as much as 4.5% earlier in the session.

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TSMC doubles down on the U.S.

Taiwan Semi had already announced a $65 billion investment in U.S. factories related to the CHIPS Act, and the news of the additional $100 billion seems like a win for the company, especially at a time when the Trump administration is strongly advocating for companies to manufacture in the U.S.

Adding more capacity in the U.S. also helps Taiwan Semi diversify away from its base in Taiwan, which investors believe is at risk of invasion from China.

Notably, the stock fell yesterday after the news was announced as fears around tariffs may have overshadowed it. Today, investors seem to be looking at it from another perspective, seeing it as a win for the world's largest chip manufacturer.

What's next for Taiwan Semi

Chip stocks were down broadly on the tariff news, but Taiwan Semi has a stronger competitive position than many of its chip-designing customers who are sensitive to global prices and demand.

While semiconductor manufacturing is a cyclical business, TSMC's competitive advantage looks stronger with the investment in the U.S. and it mitigates what many investors see as the greatest risk to the company, a conflict in Taiwan.

Currently, the stock trades at a price-to-earnings ratio of 25.5, making the stock look like a bargain, especially if the business can keep up its momentum.