Taiwan downplays national security concerns after Trump and TSMC’s $100bn semiconductor deal
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Taiwan would ensure that its most advanced semiconductor technology does not go out of the island, the presidential office said, after the world’s largest contract chipmaker signed a $100bn deal with Donald Trump.
Taiwan presidential office spokesperson, Karen Kuo, said the government was aware of the Taiwan Semiconductor Manufacturing Company Limited (TSMC) deal which must go through government assessments to safeguard the interests of the island as well as the investors.
Ms Kuo said TSMC “will keep its most advanced manufacturing processes in Taiwan”.
“Following TSMC’s US$100bn investment in the US, Taiwan will work to ensure our high-tech industries remain competitive while expanding their global presence, paving the way to building resilient semiconductor supply chains with our partners & a stronger Taiwan-US partnership,” a statement on X said.
It follows fears that the deal could undermine the island’s national security as the industry remains crucial to the economy and the country’s defence.
The deal was announced on Monday by Mr Trump and chief executive of TSMC, CC Wei, to invest an additional $100bn over the next four years to expand semiconductor operations in the US. It was on top of more than $65bn investment already.
TSMC, the world’s biggest semiconductor manufacturer, produces chips for companies including Apple, Intel, and Nvidia.
“We’re going to produce many chips to support AI progress and to support the smartphones’ progress, and we thank President Trump again for his support,” Mr Wei said, adding that the deal will create thousands of high-tech manufacturing jobs.
Mr Trump, who has repeatedly accused Taiwan of “stealing” the US semiconductor business, said the deal will allow TSMC to avoid industry-wide 25 per cent tariffs.
“By doing it here, he has no tariffs,” Mr Trump said, when he was questioned his threats of tariffs have played in influencing companies’ decisions to invest in the US.
Ms Kuo cited the Industrial Innovation Act and said the companies must obtain approval from the government for foreign investments above $45.5m.
She added that the government was drafting a plan to forge resilient and diversified semiconductor supply chains with the US and other partners.
Government statements indicated that TSMC had not yet sought the necessary approvals for foreign investments of that scale at the time of the deal’s announcement.
Opposition leaders in Taiwan have said the deal could undermine the country’s defence. KMT’s legislative caucus, Fu Kun-chi, questioned: “Where is Taiwan’s national security if TSMC become ASMC (American Semiconductor Manufacturing Company) and the sacred mountain that protects the country is gone?”
On Tuesday, Mr Trump said the US should get rid of the 2022 bipartisan law that give $52.7bn in subsidies for semiconductor chips manufacturing and production and use the proceeds to pay debt.
“The CHIPS act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it,” Mr Trump said in a speech to Congress. “You should get rid of the CHIPS Act and whatever is left over, Mr Speaker, you should use it to reduce debt.”
The CHIPS and Science law signed by then-president Joe Biden in August 2022 included $39bn in subsidies for US semiconductor manufacturing and related components along with $75bn in government lending authority.
