TAIPEI (Taiwan News) — TSMC’s recent US expansion has sparked concerns over what it might mean for Taiwan’s silicon edge.
On March 3, TSMC Chair and CEO C.C. Wei (魏哲家) and US President Donald Trump announced that the world’s largest contract chipmaker would be investing an additional NT$3.29 trillion (US$100 billion) to build five more advanced chip facilities and an R&D center in the US.
The company’s investment has now surged from US$12 billion to US$165 billion, largely due to pressure from Washington. The injection is more than 10 times its original commitment and is the company’s largest overseas investment.
Taiwan has long relied on its “silicon shield,” believing its semiconductor dominance ensures US protection in the event of a Chinese invasion. Now, TSMC is already producing cutting-edge 4 nm chips at its first Fab 21 in Phoenix, Arizona.
Public opinion in Taiwan is divided. A survey found that 43.8% support TSMC’s US investment, while 42.8% oppose it, Nikkei Asia reported Wednesday. While many believe it strengthens US-Taiwan ties, more than half doubt whether the US would defend Taiwan if China attacked.
Heart of matter
However, Taiwan remains the heart of the operation. Back home, TSMC is expanding 2 nm production in Hsinchu and Kaohsiung and developing next-generation chips in Tainan. The company is also scaling up advanced chip packaging in Tainan, Chiayi, and Miaoli to meet demand from AI giants like Nvidia, Amazon, and Google.
“If there were no TSMC, the world’s economy would basically stall,” Wei warned, highlighting the company’s global importance.
Beijing’s growing military aggression adds to the pressure, as China considers democratic Taiwan as its territory and has vowed to take the country by force if necessary.
Tensions between the two have escalated, with Beijing responding to President Lai Ching-te’s (賴清德) remarks that China is a “foreign hostile force” with military drills. Research firm Rhodium Group said more than US$2 trillion would be at risk in such a conflict.
Several chip industry sources said TSMC’s increasing investment in the US comes mainly from fears among customers and in Washington that growing Chinese aggression could disrupt global chip supplies, per Nikkei Asia.
TSMC’s biggest customers, including Apple and Nvidia, are urging it to diversify production. “If we add onshore manufacturing by the end of this year, we should be quite good,” Nvidia CEO Jensen Huang (黃仁勳) said.
The US has about 11% of the global market in advanced chip production as of 2025, set to double to 22% by 2030, TrendForce analyst Joanne Chiao said. Taiwan’s share would drop from 71% to 58% over the same period but still have over half.
R&D shift
However, experts warn that shifting R&D overseas risks weakening Taiwan’s technological edge. “TSMC’s US investments will also magnetize Taiwanese suppliers,” said Isaiah Research senior analyst Eddie Han. Shortages of electricity, water, and land in Taiwan may also be pushing TSMC abroad.
Other industry experts disagree. Former Intel CEO Pat Gelsinger said that TSMC’s investment will not revive the US chip industry.
“If you do not have R&D in the US, you will not have semiconductor leadership in the US,” he contended. The CEO added that TSMC’s research and development is still based in Taiwan and has no plans to move overseas.
“Unless you are designing the next-generation transistor technology in the US, you do not have leadership in the US,” he explained.
Furthermore, despite the investment push, replicating Taiwan’s efficiency is difficult. Asia Pacific technology research coordinator at BofA Global Research Simon Woo said manufacturing yield and talent are two key elements required to produce chips outside of Asia.
“Starbucks coffee tastes the same everywhere, but semiconductor quality varies,” he said. “It's like sashimi ... It tastes the best in Japan, and for a variety of reasons, but is very difficult to replicate in scale in other parts of the world.”
