TAIPEI (Taiwan News) — The National Science and Technology Council on Thursday reaffirmed that TSMC’s most advanced chip technologies will remain in Taiwan under a strict “N-2 review rule.”

The issue drew attention in the Legislative Yuan after TPP Legislator Liu Shu-pin (劉書彬) questioned whether sufficient safeguards were in place to protect core semiconductor research and development, per CNA.

NSTC Deputy Minister Lin Fa-cheng (林法正) told lawmakers that Taiwan maintains a list of critical technologies subject to strict controls, per RTI. The list is reviewed annually and applies to specific regulated entities and technical specifications, he said.

Under the N-2 rule, only technologies two generations behind TSMC’s most advanced domestic processes may be deployed overseas. For example, if TSMC were producing 1.2 or 1.4 nm chips in Taiwan, only 1.6 nm technology would be eligible for foreign production. Generally, the smaller the process, the more advanced the chip.

Lin added that most of TSMC’s research workforce remains based in Taiwan and operates in compliance with regulations. Controls also extend to personnel handling sensitive technologies, he said.

Industrial Development Administration Deputy Director General Tsou Yu-hsin (鄒宇新) said any TSMC investment in the US would still require regulatory approval. Large-scale projects must pass Investment Commission review, he added.