CC Wei, CEO of Taiwan Semiconductor Manufacturing Company (TSMC), will be on display on the left, accompanied by US President Trump’s AI and Crypto Emperor Howard Lutonic and US Secretary of Commerce, David Sachs, at the White House on March 3rd. New manufacturing facility in the United States. Andrew Harnik/Getty Images hides captions
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Andrew Harnik/Getty Images
Taiwan, Taiwan – President Trump’s plan for a major Taiwanese semiconductor company investing $100 billion in new semiconductor facilities in Arizona divides politics here. Opposition politicians worry that it could undermine the “silicon shield,” which many believe will help keep Taiwan safe from China’s attacks.
The day after the contract was announced, Whip Chie asked whether TSMC would be transformed into an “American semiconductor manufacturer.”
In a Facebook post, former KMT president Ma Ying-Jeou accused Taiwan’s current President Lai Ching-Te of “selling” TSMC to Trump, calling it a “major national security crisis.”
Taiwan’s “Silicon Shield”
“Silicon Shield” is a comparative phorology of how Taiwan’s role as a major global supplier of high-tech products can help ensure its own geopolitical security. China and the US economies are heavily dependent on the import of advanced semiconductors from Taiwan.
The island produces 60% of the world’s semiconductors. Thus, both countries have some interest in avoiding conflicts that could endanger critical tip flows.
Fu and Ma were publicly concerned that TSMC, the company’s largest stake, and the Taiwanese government, could end up gambling its benefits.
Two days after announcing the investment standing with Trump, TSMC CEO CC Wei returned to Taipei last week to hold a press conference with Taiwan’s president, Lai Qingte, emphasizing that the company’s most advanced semiconductor technology will remain in Taiwan.
For many of the Taiwanese opposition parties, who combine majority in parliament, explanations are not stacked.
Opposition lawmaker Kocheong says the Taiwanese government needs to be more transparent about how the $100 billion deal was negotiated between the TSMC and President Trump. Ashish Valentine/NPR hidden caption
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Ash Valentine/NPR
“We understand that this type of negotiation will take place closed doors, but now that’s over, we’re asking the government to clarify the entire process that led to the TSMC to make an announcement with President Trump,” says opposition KMT Lawmaker Ko Ju-Chun.
A more transparent framework for explaining these negotiations is important to avoid any damage to Taiwan’s “silicon shield” in the future.
Jason Huss, a former Taiwanese lawmaker and a senior fellow focusing on technology policy at a think tank at the Hudson Institute in Washington, D.C., said Taipei is seeing a $100 billion commitment of “insurance contracts for security.”
“Without US security guarantees and commitments, there’s no shield,” he says. “Taiwan needs to keep pushing boundaries by creating high-level chips in the US for customers like Apple and Nvidia, but it still maintains Taiwan’s most cutting-edge generation.
Between Investment and Duty: Carrots and Sticks
Trump’s negotiation style is more aggressive, but he is not the first US president to want to make more semiconductors in the US soil.
Semiconductor expert Darson Chiu, director of the Asia-Pacific Chamber of Commerce and Industry, said both former President Biden and Trump “want to make sure that the semiconductor supply chain is integrated and there is no need to deal with external threats such as mainland China.”
Onshoring helps the US reduce its dependence on Taiwan. Meanwhile, Chiu says Taiwan’s priorities are to ensure that its unique and important role in the supply chain remains undisappearing.
But moving activities from Taiwan to the US isn’t just a financing issue, says Chiu.
He says that stronger unions and workers protection in the US means that “implementing semiconductor operations in the US is actually much more expensive, especially if US companies want to maintain the quality of TSMC manufacturing as in Taiwan.”
TSMC is in difficulty in harmonizing with and adjusting the management style at Fabs near Phoenix. There are no labor unions in TSMC’s business in Taiwan, and engineers there often report long hours and weekend changes.
For now, Chiu believes TSMC can make a commitment to the US without sacrificing Taiwan’s most advanced business. But Chiu says whether silicon shields are safe in the future depends on whether Trump is happy or if he pushes more.
“I think TSMC Chairman Wei is facing a dilemma because, on the one hand, he needs to meet the needs of the Trump administration. On the other hand, he needs to ensure that the people of Taiwan are safe,” says Chiu.
Sung Wen-Ti, a political scientist at Australian National University, says that the US president is likely to be happy for now, but “Trump’s brand of foreign policy has always been about unpredictability.”
