[Taiwan Chip News] TSMC Increasing US Investment, Taiwan Government on Alert

TSMC pours 2-3 years of total revenue into the U.S.
Trump's tariff policy aligns with 'erasing Biden'
Concerns over U.S. dependence... Taiwan: "Advanced processes will be produced domestically"

After Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), decided to invest $100 billion in the United States, concerns have arisen in the industry that TSMC's business may become dependent on the U.S. If production bases are largely relocated to the U.S., the proportion of domestic production in Taiwan is likely to decrease significantly. The Taiwanese government has warned against the 'Americanization' of TSMC, stating that "cutting-edge processes will definitely be mass-produced in Taiwan."

U.S. President Donald Trump met with TSMC Chairman Wei Zhejia at the White House earlier this month and personally announced the new investment plan. The specific plan involves spending $100 billion (approximately 146 trillion KRW) to build three semiconductor factories, two advanced packaging (post-processing) plants, and one research and development (R&D) center.

President Trump, who had expressed negative views on the Biden administration's CHIPS Act supporting semiconductors, warmly welcomed the large-scale investment following the introduction of tariff policies. This aligns with his goal of 'erasing Biden' while demonstrating that the tariff policies, which have raised concerns internationally, have had tangible effects. Trump praised Chairman Wei as "one of the most important people for the U.S. economy."

TSMC had announced a $12 billion investment in the U.S. in 2020 and had since increased the investment scale to $65 billion (approximately 95 trillion KRW). It is already operating or constructing three semiconductor factories in Arizona. Once the new investments are completed, TSMC will have at least six production plants established in the U.S.

To understand the concerns about 'Americanization,' it is necessary to look at how astronomical TSMC's investment in the U.S. is. The cumulative investment of $165 billion is equivalent to about two to three years of TSMC's recent revenue.

Converting TSMC's disclosed annual revenue (in New Taiwan Dollars) to U.S. dollars yields ▲2020: $40.5 billion ▲2021: $48.1 billion ▲2022: $68.6 billion ▲2023: $63.8 billion ▲2024: $87.7 billion.

In the global semiconductor industry, concerns have emerged that TSMC's business could become dependent on the U.S. as it injects massive capital there. The potential reduction of domestic jobs and the risk of leakage of TSMC's advanced technology pose critical problems not only for the company but also for Taiwan. For now, the Taiwanese government is clearly drawing a line.

According to foreign media including Taiwan Economic Daily, Wu Chengyuan, Chairman (minister-level) of Taiwan's National Science and Technology Council (NSTC), recently told reporters, "The principle of rooting R&D and mass production of advanced processes in Taiwan will never change," emphasizing, "The first mass production plant for TSMC's most advanced processes will definitely be in Taiwan, and expanding production bases overseas will only be possible afterward."

He did not directly evaluate the investment in the U.S. negatively. He cited it as a positive development such as the 'globalization of the semiconductor industry,' but it is understood that Taiwan's geopolitical risks between the U.S. and China were taken into account. Wu said, "Taiwanese companies investing in the U.S. is about internationally expanding Taiwan's manufacturing capabilities," adding, "It is very beneficial for Taiwan and will further protect Taiwan's security."

Wu also mentioned that TSMC's investments are expanding to various countries including the U.S., Japan, and Germany, aimed at the development of the semiconductor and artificial intelligence (AI) industries. He evaluated, "Taiwan alone cannot lead the global semiconductor development nor decide the technological direction. Cooperation with the world is necessary, and encouraging the global market and customers technologically will give us greater strength."

TSMC Chairman Wei Zhejia reportedly also told the Taiwanese government, "The first mass production plant will definitely be in Taiwan, and only after the successful wafer manufacturing and mass production technology of the most advanced processes in Taiwan will the production bases spread worldwide, establishing a manufacturing system cooperating with friendly countries in the democratic supply chain."

Taiwan Economic Daily News ? Reporter Jang Luigi / Translation by Asia Economy