What TSMC’s US$100bil
investment in the US
means for Taiwan
While Taiwan Semiconductor Manufacturing Co’s investment might deflect the threat of tariffs, there are fears it could hurt Taiwan’s economy and weaken its ‘silicon shield’.
TSMC is the world’s biggest maker of the critical technology that has become the lifeblood of the global economy.
This week’s announcement takes the total amount TSMC has pledged to invest in the US to US$165 billion, which the company says is the “largest single foreign direct investment in US history”.
It follows Trump’s accusations that Taiwan stole the US chip industry and his threats to impose tariffs of up to 100% – and Taipei’s promises to invest more in the US.
AFP looks at what TSMC’s investment could mean for Taiwan.
‘Silicon shield’
Semiconductor chips are used in everything from smartphones and televisions to electric vehicles and missiles – and more than half of them are made in Taiwan.
The concentration of chip manufacturing on the island has long been seen as a “silicon shield” protecting it from an invasion or blockade by China – and an incentive for the US to defend it.
China has upped military pressure on Taiwan in recent years to press its claim of sovereignty over the self-ruled island, where TSMC has its headquarters and the bulk of its fabrication plants.
That has fuelled calls for the firm to move more of its production off the island to avoid supply disruptions if China did attack.
Trump recently warned of import levies of 25%, or higher, on overseas-made chips, which one analyst has said could trigger a recession in the industry.
While TSMC’s latest investment might deflect the threat of tariffs, there are fears it could hurt Taiwan’s economy and weaken its “silicon shield”.
“The more TSMC produces in the US, the less important Taiwan will be in geopolitics and the less incentives the US will have to help Taiwan in the future,” said Ko Ju-chun, a lawmaker with the main opposition Kuomintang party.
Control of TSMC
Taiwan’s leaders are aware of the risks as they try to stay onside with their most important security backer Washington and protect the island’s status as a chip-making powerhouse.
President Lai Ching-te’s office said yesterday the government would review TSMC’s deal “in accordance with the law” and ensure that the “most advanced” chip-making processes stayed in Taiwan.
TSMC had already pledged to invest more than US$65 billion in three factories in the US state of Arizona, one of which began production in late 2024.
The US$100 billion investment will be used to expand its US footprint further, with three new fabrication plants, two advanced packaging facilities and a research and development team centre.
Richard Hu, deputy director of the Taiwan Center for Security Studies think tank, said Trump wanted to prevent TSMC from falling into China’s hands and to make it a “technological asset of the US”.
“Trump’s ultimate goal is to ensure that the US can fully or critically control TSMC’s semiconductor production, making it a de facto part of America’s chip industry,” Hu said.
– Defence guarantees –
Taipei security analyst Su Tzu-yun was more optimistic, telling AFP that TSMC’s investment would make Taiwan “safer” and help grow the chip industry.
“It would also build trust between Taipei and Washington, and ease Trump’s concerns about US economic security,” said Su, from the Institute for National Defense and Security Research.
“I think the importance of Taiwan is not only TSMC but also the geostrategy,” Su said, noting the importance of global shipping lanes near Taiwan.
However, James Yifan Chen of Tamkang University said higher manufacturing costs in the US would drive up prices of products using TSMC chips.
Moreover, there were no guarantees the investment would make the mercurial Trump more inclined to defend Taiwan.
“The deal’s effect on US willingness to defend Taiwan is unclear,” said Wen-Ti Sung, a nonresident fellow with the Atlantic Council’s Global China Hub.
“It really depends on how Trump feels on any particular day, and whether Beijing will attempt to outbid Taiwan subsequently,” Sung said.
One of the fart that ๅฐๆฏ keep repeating is the existence of TSMC prevented China from retaking Taiwan. The Yank wouldn't allow this to happen & would help Taiwan to defense the 'invasion'.
ReplyDeleteWakakakaka… TSMC's move to Yankeeland could reduce that fart to real foul air as the Yank would have a chip manufacturing backup in its own soil, to worry about what ciuld happened to Taiwan.
These mfering ๅฐๆฏ r forgetting that the Chinese would use force to reunify Taiwan into their country with or without ANY Yankee helping the renegade Taiwan!