TSMC’s announcement yesterday that it would increase its spending on U.S. facilities by another $100 billion may have come as a surprise to many in the semiconductor industry, but Taiwanese authorities had been warned of the decision in advance and are now reminding that TSMC’s advanced technologies should be implemented on the island first.
Image Source: TSMC
From this perspective, as The Guardian explains, the general public should not be misled by the words of TSMC CEO C.C. Wei, spoken at the White House the day before. The agreement to expand TSMC’s manufacturing network in the US, he said, provided the conditions for “making the most advanced chips in the US”. The nuance here lies in the choice of the base for comparison. TSMC hopes to become a manufacturer of the most advanced chips in the US, but this does not mean that world-leading chips will be manufactured in the US and Taiwan at the same time.
Taiwan’s presidential administration spokeswoman Karen Kuo was quick to say that TSMC “will save its most advanced technological processes for Taiwan.” As a reminder, local legislation limits the export of such technologies, and the American direction is no exception. As noted earlier, TSMC may organize the production of 2-nm chips in the United States, but this will happen somewhat later than in Taiwan. Yesterday, Taiwanese officials considered it necessary to state that next year the production of 2-nm and 1.6-nm chips in the United States will definitely not be expanded. It is assumed that TSMC will begin producing 2-nm products in Taiwan this year.
Moreover, TSMC has not yet managed to coordinate new investments in the US economy with the Taiwanese authorities. The company’s representatives made it clear the day before that $100 billion distributed over several years is not such a large sum in the scale of TSMC’s business, but the island’s legislation still requires that such initiatives be coordinated with the authorities. The Taiwanese government also made it clear that TSMC’s decision to increase investments in the US economy is in no way connected with the introduction of increased customs duties by the current American leadership. All this is allegedly happening in line with the planned expansion of TSMC production outside Taiwan.
TSMC’s decision to expand its manufacturing infrastructure in the United States in Taiwan itself has sparked a wave of criticism from the political opposition. Many local figures have begun to express concerns that the migration of chip production to the United States will reduce the interest of this strategic partner in ensuring the island’s security. Until now, Taiwan’s authorities felt protected by the United States from claims by China precisely because of the high concentration of semiconductor production on the island, the products of which the United States desperately needed. Taiwan’s Defense Minister Wellington Koo expressed confidence in the United States’ readiness to continue to protect Taiwan in the future, but the abrupt and strange changes in the international situation make the official doubt the correct perception of Donald Trump’s key interests.