Taiwan Defies Tech Harm Allegations as TSMC Expands Global Footprint

Taiwan's tech sector pushes back against claims of economic harm as its semiconductor crown jewel, TSMC, accelerates overseas expansion.

The Pushback Narrative

Official channels dismiss narratives framing TSMC's international builds as detrimental. The strategy gets painted as strategic globalization, not industrial hollowing-out. Supply chain resilience tops the talking points.

Foundries on the Move

Construction cranes swing outside Asia. TSMC cuts ribbons on advanced packaging in Japan, breaks ground on a mega-fab in Arizona, and eyes potential European ventures. Each move triggers fresh rounds of analyst speculation and geopolitical chess-playing.

The Finance Jab

Meanwhile, investors shrug—stock prices just track capacity utilization and the next quarter's guidance, not political posturing. Another reminder that in global tech, the spreadsheet often bypasses the statecraft.

The Balancing Act

Can the island maintain its indispensable role while its champion plants flags worldwide? That's the multi-billion-dollar question hanging over Hsinchu. The world's chip supply—and a chunk of Taiwan's economic leverage—depends on the answer.

Cheng says the U.S. is counting on other partners, not just Taiwan, for chip production

On Thursday, the United States said it had struck a deal with Taiwan to cut tariffs on Taiwanese goods from 20% to 15% in return for $500 billion in finance or investment from Taiwan, including its chipmakers.

However, some Taiwanese analysts and lawmakers have voiced unease that the shift of capital and facilities abroad could erode the domestic high‑tech ecosystem. The agreement has worried nationals who believe the Democratic Island could undermine the island’s economic strength, particularly after Commerce Secretary Howard Lutnick suggested relocating 40% of the nation’s supply chain to America. The U.S. Commerce Department had also noted that the deal will “drive massive reshoring of America’s semiconductor sector.”

Nonetheless, Cheng reassured nationals that the U.S. objective of domestic chip independence for national security isn’t just Taiwan-dependent, pointing to efforts with other countries and domestic chipmakers.

She added, “Everyone is working together in the United States to revitalize the development of the AI industry and to lead AI-related business opportunities. It is not something Taiwan is expected to accomplish on its own.”

On Friday, Premier Cho Jung-tai also praised negotiators for a job well done in securing the deal, noting that the achievements so far reflect significant effort. 

Also speaking on the deal, Bloomberg analysts Adam Farrar, Michael Deng, and Nicole Gorton-Caratelli said the trade agreement will only modestly influence Taiwan’s economy.

Still, it carries significant political weight amid increasing pressure from China. They also contended that the U.S. could see domestic semiconductor production rise significantly in the next ten years.

Taiwan’s chip production capacity will be at 80%

Speaking in Taipei on Friday, Economics Minister Kung Ming-hsin also projected that by 2030, Taiwan will hold roughly 85% of the capacity for advanced chips at 5 nanometers or below, while the U.S. will make up about 15%. He added that by 2036, Taiwan should hold about 80% of capacity, with the U.S. taking roughly 20%.

For years, Taiwan’s production of the world’s most advanced chips has been sometimes viewed as a “silicon shield” that deters potential Chinese military action. At the moment, the opposition Kuomintang has blamed the Democratic Progressive Party for jeopardizing the island’s tech sector by agreeing to trade concessions with Washington.

Taiwan’s largest semiconductor company, TSMC, is already committing an additional $100 billion into U.S. operations, building at least four more chip plants beyond those previously envisioned. Largely, its U.S. expansion has sparked worries about Taiwan’s position in the global semiconductor chain. Still, TSMC executives insist that leading-edge technologies will be developed in Taiwan and kept there for years before being relocated abroad, primarily due to logistics.

Chief Financial Officer Wendell Huang even commented, “The most leading-edge technologies will be run in Taiwan because of practical reasons. When they get stabilized, then we can try to accelerate the technology to MOVE overseas.”

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