As an experienced negotiator, US President Donald Trump is accustomed to providing ambiguous answers. When asked by the media how he would respond if China took military action against Taiwan, Trump has always responded by saying that Beijing would never take military action against Taiwan so long as he is in power — therefore, it is a non-issue. Although his response is true, those skeptical of the US argue it demonstrates a lack of a clear commitment.
After Taiwan Semiconductor Manufacturing Co (TSMC) on Monday last week announced it would invest an additional US$100 billion into the US — much to Trump’s delight — reporters once again asked Trump about the issue of China invading Taiwan. Trump responded by saying the US would have “a big impact if something should happen with Taiwan.” In other words, when TSMC is willing to become a lifelong partner of the US, Trump’s level of commitment appears to increase.
Trump’s response echoes a statement made by his old friend, former Japanese prime minister Shinzo Abe. If Taiwan is in trouble, the US is in trouble.
With its investment, TSMC has made a significant contribution to the advancement of Taiwan’s foreign diplomacy and national security. Although the move undoubtedly warrants respect, it is not a sacrifice on TSMC’s part — it is extremely beneficial for the company.
Trump had originally threatened tariffs if TSMC did not rescue Intel, but with the Taiwanese firm committing to setting up more plants in the US, it can leave Intel to fend for itself — TSMC does not have to worry anymore about getting burned.
Trump is also attempting to use this deal to end the semiconductor subsidy program passed during the administration of former US president Joe Biden — the CHIPS and Science Act — which is good for TSMC.
With each generation of semiconductors, the investment required is increasing. TSMC’s capital expenditure is expected to reach US$38 billion to US$42 billion this year — a level that its financially struggling competitors could not even dream of matching. The US$3.9 billion in subsidies and US$7.5 billion in loans provided by the Biden administration, if fully utilized, would provide TSMC’s main competitors with the financial means to compete.
If Trump’s push to repeal these subsidies is successful, it would ultimately ensure that TSMC remains the industry’s undisputed leader.
Taiwan has long hoped to establish its own great multinational corporations, and TSMC has already reached that stage. However, the challenges of adapting to other countries’ labor laws and government regulations have hampered its willingness to expand. Trump gave them a push, urging TSMC to grow and accelerate its understanding of multinational operations.
TSMC decentralizing its research and development (R&D) efforts provides the company with increased security and stability. Intel was once invincible until its core R&D team in the US went down the wrong path with its Pentium 4 processor — it was the Israeli R&D team that developed the Pentium M processor, ultimately saving the entire company. Industrial development requires bold steps forward — remaining stagnant is not an option.
TSMC is in its heyday. However, once an industry reaches its peak, it would inevitably and gradually enter a phase of maturity. Intel’s position in the industry was once far higher than TSMC’s today, and Nokia was once Finland’s sacred protector — today, neither company is as remotely influential. This is simply a part of the natural rise and decline of the industrial cycle. For a country to develop sustainably, it should not cling to its “sacred protectors” — rather, it should continuously foster new generations of industries.
TSMC has absorbed a large amount of talent. Coupled with the impact of Taiwan’s low birthrates, other industries are now often forced to hire anyone who possesses basic skills, thereby leading to a shortage of employees in the fields of science and engineering. This is partly because many university graduates directly enter TSMC, with few choosing to pursue studies abroad for a graduate or doctorate degree.
TSMC alone brings in a significant amount of foreign currency, which places great pressure on the appreciation of the New Taiwan dollar. Other export industries face disadvantages as a result. Given this situation, how can Taiwan effectively nurture the next industry?
Taiwanese should welcome TSMC’s decision to redistribute a portion of its production capacity to the international market and release some resources. There is no need to worry about the loss of the nation’s so-called “silicon shield.” The US has been protecting Taiwan since the Korean War — did Taiwan have a semiconductor industry back then?
Tommy Lin is president of the Formosa Republican Association and the Taiwan United Nations Alliance.
Translated by Kyra Gustavsen
On May 7, 1971, Henry Kissinger planned his first, ultra-secret mission to China and pondered whether it would be better to meet his Chinese interlocutors “in Pakistan where the Pakistanis would tape the meeting — or in China where the Chinese would do the taping.” After a flicker of thought, he decided to have the Chinese do all the tape recording, translating and transcribing. Fortuitously, historians have several thousand pages of verbatim texts of Dr. Kissinger’s negotiations with his Chinese counterparts. Paradoxically, behind the scenes, Chinese stenographers prepared verbatim English language typescripts faster than they could translate and type them
More than 30 years ago when I immigrated to the US, applied for citizenship and took the 100-question civics test, the one part of the naturalization process that left the deepest impression on me was one question on the N-400 form, which asked: “Have you ever been a member of, involved in or in any way associated with any communist or totalitarian party anywhere in the world?” Answering “yes” could lead to the rejection of your application. Some people might try their luck and lie, but if exposed, the consequences could be much worse — a person could be fined,
Xiaomi Corp founder Lei Jun (雷軍) on May 22 made a high-profile announcement, giving online viewers a sneak peek at the company’s first 3-nanometer mobile processor — the Xring O1 chip — and saying it is a breakthrough in China’s chip design history. Although Xiaomi might be capable of designing chips, it lacks the ability to manufacture them. No matter how beautifully planned the blueprints are, if they cannot be mass-produced, they are nothing more than drawings on paper. The truth is that China’s chipmaking efforts are still heavily reliant on the free world — particularly on Taiwan Semiconductor Manufacturing
Keelung Mayor George Hsieh (謝國樑) of the Chinese Nationalist Party (KMT) on Tuesday last week apologized over allegations that the former director of the city’s Civil Affairs Department had illegally accessed citizens’ data to assist the KMT in its campaign to recall Democratic Progressive Party (DPP) councilors. Given the public discontent with opposition lawmakers’ disruptive behavior in the legislature, passage of unconstitutional legislation and slashing of the central government’s budget, civic groups have launched a massive campaign to recall KMT lawmakers. The KMT has tried to fight back by initiating campaigns to recall DPP lawmakers, but the petition documents they
RSS