While the US and Ukraine are reshaping bilateral relations after a jaw-dropping argument between their leaders in a televised meeting on Friday last week, Taiwan’s leading chip firm Taiwan Semiconductor Manufacturing Co (TSMC) on Tuesday announced that it would invest an additional US$100 billion in the US, showing a different strategy to seeking international support against neighboring authoritarian states.
The meeting between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy was organized last week to sign a mining agreement that Trump had demanded as a condition for future support for Ukraine. However, the meeting turned into a heated argument as US leaders said Ukraine should express more gratitude to Washington and agree to a ceasefire with Russia, while Zelenskiy, citing Moscow’s record of broken diplomatic promises, sought more security guarantees.
Not surprisingly, the Trump administration paused military aid to Ukraine after the meeting, a move to reassert Trump’s foreign policy centered on US interests and the “America First” principle. This deterioration in US-Ukraine relations has fueled uncertainty over the Ukraine-Russia war and deepened international concerns that Trump’s policy on Ukraine would encourage increased aggression by Russia and China.
European countries have urgently initiated a joint-force security plan and a project to mobilize more than 800 billion euros (US$863 billion) to quickly build up European defense and sustained support for Ukraine, and eventually establish defense “independence,” as the US government has suggested.
Taiwan has also faced Trump’s complaints over its low defense budget and dominance in global semiconductors. However, US politicians and academics have repeatedly underlined Taiwan’s importance to US interests, as Taiwan holds a strategic geopolitical position, plays a key role in global high-tech supply chains and has been reallocating resources outside of China.
Following President William Lai’s (賴清德) pledges to increase defense spending and increase imports from the US, TSMC announced it would build three more chip plants, two packaging facilities and one research and development center in the US.
Some view TSMC’s new investments as a compromise to Trump’s demands, and raised concerns about a weakening of Taiwan’s “silicon shield,” posing a threat to national security. However, as the firm’s overseas investments need official approval, TSMC’s most advanced technology and processes would stay in Taiwan, assuring that the nation’s lead in cutting-edge technologies would be maintained, authorities said.
Just as an increase of the defense budget could help Taiwan gain access to advanced US-made weapons that were previously unavailable for purchase, the investment is a relatively wise strategic choice for TSMC to further boost its competitive edge in the global market and deepen Taiwan’s economic ties with the US.
The US fabs would take six to 10 years to build. TSMC said that projected output of the six factories in the US would account for only 5 to 7 percent of its overall production capacity, which could be lower as the company continues to expand global operations.
Moreover, TSMC would be able to expand its own production, instead of investing in its US rival, Intel — reportedly one of the options in Trump’s plan to increase US chip production. The US factories could help it avoid tariffs and provide more direct services to its US clients. The investment could become a partnership between Taiwan and the US in artificial intelligence development and the high-tech competition with China.
TSMC’s global investments could create a win-win situation with Taiwan’s allies. Aside from the US, Taiwan should also increase its economic ties with European and Asian countries unsettled by China’s threats, ensuring that Taiwan’s national security is a common interest of Taiwan and the rest of the world.
The first Donald Trump term was a boon for Taiwan. The administration regularized the arms sales process and enhanced bilateral ties. Taipei will not be so fortunate the second time around. Given recent events, Taiwan must proceed with the assumption that it cannot count on the United States to defend it — diplomatically or militarily — during the next four years. Early indications suggested otherwise. The nomination of Marco Rubio as US Secretary of State and the appointment of Mike Waltz as the national security advisor, both of whom have expressed full-throated support for Taiwan in the past, raised hopes that
Whether in terms of market commonality or resource similarity, South Korea’s Samsung Electronics Co is the biggest competitor of Taiwan Semiconductor Manufacturing Co (TSMC). The two companies have agreed to set up factories in the US and are also recipients of subsidies from the US CHIPS and Science Act, which was signed into law by former US president Joe Biden. However, changes in the market competitiveness of the two companies clearly reveal the context behind TSMC’s investments in the US. As US semiconductor giant Intel Corp has faced continuous delays developing its advanced processes, the world’s two major wafer foundries, TSMC and
Authorities last week revoked the residency permit of a Chinese social media influencer surnamed Liu (劉), better known by her online channel name Yaya in Taiwan (亞亞在台灣), who has more than 440,000 followers online and is living in Taiwan with a marriage-based residency permit, for her “reunification by force” comments. She was asked to leave the country in 10 days. The National Immigration Agency (NIA) on Tuesday last week announced the decision, citing the influencer’s several controversial public comments, including saying that “China does not need any other reason to reunify Taiwan with force” and “why is it [China] hesitant
We are witnessing a sea change in the government’s approach to China, from one of reasonable, low-key reluctance at rocking the boat to a collapse of pretense over and patience in Beijing’s willful intransigence. Finally, we are seeing a more common sense approach in the face of active shows of hostility from a foreign power. According to Article 2 of the 2020 Anti-Infiltration Act (反滲透法), a “foreign hostile force” is defined as “countries, political entities or groups that are at war with or are engaged in a military standoff with the Republic of China [ROC]. The same stipulation applies to
RSS