As TSMC expands internationally, it must balance its corporate responsibilities with the interests of both the Taiwanese government and the US.
One critical area is data security and the risk of leaks. TSMC’s advanced chip designs and manufacturing data are not only company secrets but also of strategic importance to national security, so the firm must operate securely abroad while assuring home and host governments that facilities are not vulnerable to espionage or other threats.
The company has taken several steps to mitigate these risks. First, TSMC has implemented “strict access controls” at its overseas facilities, similar to those in Taiwan, limiting who can enter sensitive areas and requiring authentication for anyone handling confidential information.
Second, TSMC often works with local authorities to address security concerns. For instance, TSMC’s Arizona facility has reportedly been under surveillance by US federal agencies to protect it from malicious actors; while details are classified, this indicates a cooperative effort between TSMC and the US government to maintain site security.
TSMC also stays in close contact with Taiwan’s intelligence and security agencies. Because any breach could undermine Taiwan’s reputation and strategic position, the company shares information with these agencies and coordinates incident-response plans, aligning corporate security with state security goals.
TSMC carefully navigates the regulatory and policy environment in both Taiwan and the US. When accepting incentives or subsidies, the company must comply with conditions that can conflict with business interests.
For example, the US CHIPS Act comes with strings attached. Companies receiving federal funding are restricted from expanding advanced chip production in China for a decade, and TSMC has publicly committed to abiding by these restrictions, effectively agreeing not to build new fabs in China for advanced chips.
By complying, TSMC secures US subsidies and avoids potential penalties. It also gives up opportunities in China — a strategic trade-off — while saying it will not “neglect” the Chinese market and will adjust investments accordingly.
TSMC expects the US to reciprocate by supporting its business. Executives have lobbied for continued industry support, including research funding and favorable trade policies, and have engaged policymakers on the company’s role in US tech leadership and national security to keep interests aligned.
Taiwan’s government also expects TSMC to act in the national interest. There are concerns about foreign attempts to obtain TSMC’s technology or even take control of the company, and in 2024 media reports said the US was considering investing in TSMC to secure a stake in a firm deemed critical to national security.
TSMC’s leadership quickly addressed these concerns. They emphasized independent governance, noted that its board is made up of Taiwanese citizens, and reassured stakeholders the company would not become a “branch” of any foreign government.
The company has also stated it will not allow any external entity to dictate its technology roadmap or interfere with operations. This stance helps maintain trust in Taiwan and among investors while signaling that TSMC will cooperate with governments on security and supply-chain issues without compromising core business principles.
To balance company and state interests, TSMC engages in open communication with all stakeholders, including shareholders, customers, and the governments of Taiwan and the US.
TSMC regularly updates the public on operations and investments to manage expectations. After announcing a US$100 billion (NT$3.08 trillion) expansion in the US, executives clarified that serving customers remains the priority and that the buildout is about long-term supply, while also highlighting continued investment in Taiwan to ease fears the company is “moving out.”
Transparency is crucial for maintaining stakeholder trust. If TSMC were perceived as too subservient to the US or neglecting Taiwan, it would face backlash; if it seemed focused on profit at the expense of global security, it could lose customers.
Through careful messaging and a vision of “win-win” outcomes, TSMC aims to maintain goodwill on all sides. The CEO has repeatedly said the company’s expansion in the US is “beneficial to both the United States and Taiwan,” strengthening supply-chain resilience and creating jobs in both countries.
Another aspect of balancing interests is addressing potential conflicts of interest. If a US customer requests certain technology or the US government seeks assistance in a sensitive project, TSMC must respond without compromising intellectual property.
The company relies on internal policies to handle such situations. Decisions must respect confidentiality agreements and company ethics, which means even a US government request for advanced designs for defense purposes would likely be declined unless it fits contractual bounds and does not harm TSMC’s competitive position.
TSMC must also maintain trust with all customers, including those in China. It cannot appear to favor one government over another, so it adheres to standard business practices and avoids political activities beyond what is necessary.
The strategic balancing act is not without challenges. TSMC must continually monitor evolving cybersecurity risks and shifting political priorities.
Still, experience suggests that with strong leadership, clear communication, and a long-term focus, the company can navigate these complexities. By protecting trade secrets while deepening partnerships with key nations, TSMC offers a model for multinationals operating in sensitive industries — safeguarding its interests while contributing to global stability.
