TSMC has pledged to invest $100 billion in the US, a move that President Donald Trump claims is proof of his “America First” investment plan working. However, some argue that the decision was driven by customer demand rather than Washington pressure.
Taiwan’s chip industry has been credited as a “silicon shield,” protecting the self-governing island from Beijing pressure. TSMC, the world’s leading contract chipmaker, has diversified its supply chain with new plants in the US, Japan, and Germany. However, some Taiwanese officials are questioning the government’s plans to allow more operations to open in the US.
The opposition party, Kuomintang, has raised concerns that the investments could negatively affect Taiwan’s “silicon shield.” The island’s third political party, Taiwan People’s Party, is also skeptical about whether TSMC will move its most advanced technologies to the US in the near term.
Analysts believe that TSMC’s massive investment won’t threaten Taiwan’s place in the chip supply chain. Ninety percent of TSMC’s 5-nanometer chip production remains in Taiwan, and the first 3-nanometer chips are only made on the island. The Arizona plant will likely remain behind the cutting-edge, with TSMC porting over tried-and-true processes from Taiwan.
The US government must still approve TSMC’s investment. Some analysts argue that TSMC’s decision is commercially driven and not driven by Washington pressure. However, others are skeptical about whether TSMC can charge enough for its US manufacturing to justify the investment.
The chip industry is expected to continue to drive demand for advanced chips, with Taiwan playing a key role in fulfilling this demand. Analysts believe that timelines for reaching the next generations of chips are not quite aligned with US capacity right now, and that the US will always lag behind.
Source: https://fortune.com/asia/2025/03/12/tsmc-us-investment-change-chip-supply-chain-taiwan