Taiwan’s TSMC Faces Backlash Over $100 Billion US Investment Deal

TAIPEI, Taiwan — Taiwan’s government is facing scrutiny following the announcement of a $100 billion investment deal with the Taiwan Semiconductor Manufacturing Company (TSMC) that may shift advanced semiconductor manufacturing to the United States. The agreement, unveiled on Monday, raises concerns among opposition leaders regarding national security and the future of Taiwan’s semiconductor industry.

Under the partnership, TSMC plans to build five new high-tech fabrication plants in the U.S., a move that President Donald Trump claims will enhance America’s semiconductor production and help avoid potential tariffs on the industry. ‘We are producing the most advanced chip on U.S. soil,’ said TSMC CEO CC Wei during the announcement at the White House.

However, Taiwanese officials have reassured the public that the country’s cutting-edge technology will not be moved offshore. Government spokesperson Karen Kuo emphasized, ‘We will ensure TSMC will keep its most advanced manufacturing processes in Taiwan’ as they undergo a thorough assessment of the deal.

The backlash comes as TSMC has reportedly begun laying plans for its future U.S. operations, which include production of its advanced 2-nanometer chips. While Taiwanese officials have suggested that no such production will take place in the U.S. next year, the details remain unclear. TSMC and the Taiwan Ministry of Economic Affairs have not confirmed specifics regarding the impending investment applications.

Taiwan’s semiconductor industry, referred to as the island’s ‘silicon shield’, plays a vital role in the nation’s economy and its defenses against potential threats from China. Critics of the deal argue that moving operations abroad would weaken Taiwan’s geopolitical significance, limiting U.S. support in the event of conflict.

James Yifan Chen, an assistant professor at Tamkang University, cautioned, ‘Taiwan without semiconductors or high-tech industries is like Ukraine without nuclear weapons.’ This sentiment was echoed by leaders of the opposition Kuomintang (KMT), who voiced their discontent at the potential risks to national security.

KMT legislator Ko Ju-Chun stated, ‘The more TSMC produces in the U.S., the lower Taiwan’s geopolitical importance will be, and the less incentive the U.S. will have to help Taiwan in the future.’

Taiwan’s Defense Minister Wellington Koo, however, maintains confidence in U.S. commitment to Taiwan. Koo reiterated that dramatic changes in international politics have sparked questions about U.S. interests, but he believes that abandoning Taiwan would be economically and politically infeasible for the United States.

As the Taiwanese government reviews the implications of the investment, they have pledged to keep the $100 billion transaction under tight scrutiny. Minister Kuo Jyh-Huei noted that any assessments will prioritize both the nation’s interests and those of investors.

Recent developments have placed Taiwan’s government in a delicate position, urging it to find a balance between lucrative investment opportunities and national security implications. The TSMC deal illustrates the complex intersection of technology, economics, and geopolitical considerations facing Taiwan today.