Taiwanese officials have moved to calm jangled nerves on chipmaker TSMC’s plans to invest $100 billion in the United States, saying the island’s most advanced semiconductor technology will stay at home.
The Taiwanese presidential office made the comment hours after TSMC’s chairman and CEO CC Wei stood next to US President Donald Trump and announced plans to expand the chipmaker’s supply chain in the US.
The Taiwanese presidential office added it would review the investment in line with its laws, which require government approval for any large overseas investment by a Taiwan company.
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The office was quoted by Reuters as saying that it had a positive view of overseas investments that would raise Taiwan’s overall competitiveness, and that the island’s government would assist TSMC with its future investments in the US.
But its review would also consider the interests of the investors and Taiwan, the office added.
Separately, Taiwanese economics minister Kuo Jyh-huei said in parliament that TSMC would not produce its most advanced technologies in the US next year.
“This is impossible,” Kuo said, responding to a lawmaker’s question regarding tech flows to the US.
“I guarantee it — the 2nm and 1.6nm processes will not go to the US next year,” Kuo was quoted as saying by state-owned Focus Taiwan.
Why it matters
TSMC has not yet begun production of 2nm and 1.6nm chips, but once it does, they would be the most advanced levels of semiconductors in the world. The chipmaker is expected to begin production of 2nm chips in the second half of 2025, and that of 1.6nm next year, Focus Taiwan said.
But TSMC has also previously committed to the US that it will use its most advanced chip making technology, called “A16”, in Arizona. The technology will be used to produce 1.6nm chips.
Still, Taiwan’s clarification on the timing of the manufacture of both those chips in the US comes amid widespread concern on the island about the transfer of TSMC’s chip tech to America.
TSMC is the world’s largest contract chipmaker and the only producer of the world’s most advanced chips that power everything from artificial intelligence to fighter jets.
That dominance has earned TSMC the monicker of a “sacred mountain,” with many on the island viewing it as a pivotal player in protecting the island from military threats such as an invasion from China. Beijing views democratically-governed Taiwan as its own territory and has, in recent months, increased military activity around the island.
It is also why there has been increasing concern on the island around keeping TSMC’s most advanced tech in Taiwan. More than 80% of Taiwanese said recently they were not in favour of sharing advanced chip technologies with Washington.
Focus Taiwan reported that Taiwanese officials maintain TSMC won’t begin producing 2nm chips the US before 2028.
‘Investment not enough to shift supply chain’
Addressing those concerns before speaking in parliament, Kuo told reporters he did not see TSMC’s $100 billion US investment as enough to shake its geopolitical importance.
“The entire world relies on chips manufactured in Taiwan,” Kuo was quoted as saying by Focus Taiwan.
“TSMC’s chip production in the US and Japan is primarily for customers in those countries,” he said. “The chips it makes in Taiwan… are also needed to meet the demand of many other customers,” he added.
TSMC’s current investments in the US, which combined with the latest announcement will not amount to $165 billion, is “not (large) enough” to draw the company’s entire supply chain there, Kuo said.
The $100 billion investment announced on Monday will involve building five chip facilities in the US, in addition to the three fabrication plants (fabs) that it has already committed to building in the country. One of those facilities, in Arizona state, has already begun mass production of 4nm chips.
The five new facilities will include three new chip fabs, two advanced packaging facilities and a major research and development centre.
TSMC did not give a timeframe for any of its new investments, apart from saying the effort would add 40,000 construction jobs over the next four years. It also did not say what technology it would use in those facilities.
The chipmaker’s US-listed shares slumped more than 4% following the announcement. On Tuesday, its Taipei-listed shares slipped nearly 2%.
- Vishakha Saxena
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