Speculation surrounding Taiwan Semiconductor Manufacturing Co.’s (TSMC, 台積電) potential expansion in the US should not be overinterpreted, as structural and economic constraints mean such moves are unlikely to weaken Taiwan’s central role in advanced chipmaking in the near future, experts said.
A recent report by The New York Times said Washington and Taipei had nearly finalized trade talks under which TSMC would be asked to add five more chip facilities in Arizona, nearly doubling its previously stated investment there.
Although TSMC did not confirm or deny the report at its earnings conference yesterday, it has fueled concerns in Taiwan about the island’s diminishing strategic importance amid rising geopolitical tensions.
Photo: CNA
However, analysts told CNA such concerns overlook timelines and fundamental industry realities.
Tech commentator Owen Lin (林宏文) said TSMC’s US investments have always been long-term in nature. Even the previously announced US$165 billion commitment in Arizona was understood as a roughly 10-year plan, as many TSMC sources had told him, given constraints such as infrastructure readiness, regulations and workforce availability.
“In semiconductors, fabs are not built simply by political declarations,” Lin said, adding that yield performance, talent availability and learning curves ultimately determine success.
Early reports of lower margins at TSMC’s US fabs, he noted, largely reflect initial ramp-up challenges rather than long-term profitability trends, making it misleading to draw conclusions from short-term data.
Lin also pointed out that the foreign media report did not specify a timeline for the additional facilities, saying the scale of TSMC’s US investment would matter more than headline numbers.
Once investment reaches a certain scale, he said, it could attract suppliers to follow, helping form a local semiconductor cluster. “No supplier is going to come to the US if there are only two fabs,” Lin said.
Meanwhile, Research Institute for Democracy, Society and Emerging Technology chief executive officer Jeremy Chang Chih-cheng (張智程) cited recent industry analyses indicating that manufacturing costs in the US can be more than double those in Taiwan due to the absence of a mature semiconductor cluster, saying advanced manufacturing there currently lacks economic rationality.
“At this stage, US manufacturing is driven mainly by security and political considerations,” Chang said, adding that overseas capacity is unlikely to replace Taiwan’s core role unless it becomes economically competitive — a threshold he said that has not been reached.
According to Chang, the key variable is whether the US can eventually develop a self-sustaining ecosystem comparable to Taiwan’s science park model, encompassing suppliers, skilled engineers, and research and development capabilities.
“TSMC is still primarily focused on meeting customer demand, and its decision to add capacity in the US should be seen as an outcome of that overarching priority,” Chang said.
TSMC yesterday projected its capital expenditure at between US$52 billion and US$56 billion this year, up 27-37 percent from US$40.9 billion last year.
About 60-80 percent of the spending will go toward advanced process development, TSMC chief financial officer Wendell Huang (黃仁昭) said.
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS