The Problem

import React from "react";

const Foo = () => {
    const [value, setValue] = React.useState(); 
    return <input value = {value} onChange = {(e) => setValue(e.target.value)}/>
}

Playground Link

This code produces the following TypeScript error:

Argument of type 'string' is not assignable to parameter of type 'SetStateAction<undefined>'.(2345)

Quick Solution

Explicitly state the generic type:

import React from "react";

const Foo = () => {
    const [value, setValue] = React.useState<string | undefined>(); 
    return <input value = {value} onChange = {(e) => setValue(e.target.value)}/>
}

Or set the initial state to an empty string.

import React from "react";

const Foo = () => {
    const [value, setValue] = React.useState(''); 
    return <input value = {value} onChange = {(e) => setValue(e.target.value)}/>
}

(This may not be appropriate for all cases, ie maybe you really do want to leave that value undefined).

Explanation

The useState function has a generic parameter which we are not setting/declaring in the original case.

This leaves TypeScript to infer the generic type from the arguments given.

In this case useState() with no arguments, TypeScript infers the type as undefined.

TypeScript doesn't know that you later want to set a string into state here.

That is, leaving the generic parameter off is equivalent of doing:

const [value, setValue] = React.useState<undefined>(); 

The generic parameter determines the type of the value and setValue variables.

In this case, the setValue function is going to be the equivalent of:

function setValue(value: undefined) : void {

}

The input component doesn't like this, the event is creating has a target.value of type string.

So to solve this, we can either explicitly set the generic type, or be aware of when and how TypeScript is going to infer the generic type.