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TSMC’s $100 Billion U.S. Investment Fuels Concerns Over Taiwan’s Chip Dominance

The semiconductor giant’s expansion in Arizona has sparked fears of a technology transfer and geopolitical risks for Taiwan.

TSMC headquarters in Hsinchu, Taiwan, in 2024
Taiwan Semiconductor Manufacturing Company (TSMC) CEO C.C. Wei joins a press conference with President Donald Trump n the Roosevelt Room of the White House on March 3, 2025. Trump announced that Taiwan Semiconductor Manufacturing Company, one of the largest manufacturers of semiconductor chips, plans to invest $100 billion in new manufacturing facilities in the United States. (Photo by Andrew Harnik/Getty Images)
A screen in Beijing shows news footage of military drills conducted by the Chinese People's Liberation Army around Taiwan on October 14, 2024.
An electronic wafer is displayed at the TSMC Museum of Innovation in Hsinchu, Taiwan, in 2024.

Overview

  • TSMC has pledged a $100 billion investment in the U.S., adding three new semiconductor plants, two packaging facilities, and an R&D center in Arizona.
  • Taiwanese officials and opposition parties worry the move could erode the island’s chip industry dominance and weaken its 'silicon shield' against China.
  • TSMC insists cutting-edge chip production and core R&D will remain in Taiwan, with U.S. facilities focusing on older generation technologies.
  • The investment follows threats of steep tariffs from the Trump administration, though TSMC and Taiwan’s government deny U.S. pressure influenced the decision.
  • Analysts believe Taiwan will retain its central role in advanced chip production, as the U.S. facilities are expected to lag behind in cutting-edge capabilities.