Alarm bells over a “hollowing out” of Taiwan’s semiconductor industry and US demands for “protection money” have fueled a panic over Taiwan. To understand how misplaced these fears are, consider the movements of global technology giants.
Nvidia Corp CEO Jensen Huang (黃仁勳), Advanced Micro Devices Inc (AMD) CEO Lisa Su (蘇姿丰) and Taiwan Semiconductor Manufacturing Co (TSMC) chairman C.C. Wei (魏哲家) could undoubtedly understand the situation best, and they continue to make key investments in Taiwan.
They do not make decisions on a whim. They are the architects of global computing power strategy and possess the highest levels of industry knowledge. No matter what political pundits might write, they know that Taiwan is not an industry risk — it is its center of gravity.
First, the world of semiconductors is not decided by opinion columns or social media threads, but by the investments of tech giants, and the past three years have been telling.
Nvidia, the world leader in artificial intelligence (AI) semiconductors, has chosen Taipei for its overseas headquarters, making Taiwan a key partner in its chip packaging and supply chain operations. If Huang believed Taiwan was a risk, he would not establish a central hub in the nation.
AMD is opening new offices in Tainan and Kaohsiung. Su knows where to make the best, fastest and most cost-effective chips on the planet. Thanks to its complete supply chain, engineering talent and manufacturing maturity, she chose Taiwan.
Taiwan also houses Google’s largest Asian data center, which are strategic assets in modern national security infrastructure.
Money talks, and it is clear from the flow of capital that tech titans see Taiwan as a safe, efficient and irreplaceable center of the global semiconductor industry.
Second, advanced and embedded manufacturing processes cannot be moved at the drop of a hat: They are subject to physical and economic constraints.
Supply chains in Taiwan are densely packed within a travel radius of just a few hours, and it costs four to 10 times as much to build an advanced chip manufacturing plant in the US as it does in Taiwan. The US also lacks engineers and supply chain support, and has water and power supply risks, making it unable to match TSMC’s manufacturing prowess and efficiency. This is why 3, 2 and 1.4-nanometer processes would continue to be housed in Taiwan. It is a technological reality that politics cannot circumvent.
Third, US President Donald Trump’s calls for a “protection fee” were more rhetoric than policy. No tariffs were levied on Taiwan during his first term, and the US Department of Defense has entrusted TSMC with manufacturing 3-nanometer chips for military use. Washington has been explicit about Taiwan’s advanced manufacturing capacity being critical to national security.
If the US planned to give up on Taiwan, it would not enmesh TSMC into its core defenses or allow Google and Nvidia to establish critical computing bases in Taiwan. The nation’s strength means safety for the US; its weakness puts the Washington at risk.
Fourth, the global structure of AI has inextricably linked US design with Taiwanese manufacturing. The US relies on Taiwan’s advanced chip fabrication capabilities. Far from trying to hollow it out, the US seeks to bolster Taiwan’s position to safeguard its own technological security.
Those with real industry knowledge are not buying the “hollowing out” theory. Taiwan’s semiconductors are not a vulnerability; they are a global tech lifeline. As long as it continues to hold cutting-edge chip technology, Taiwan is set to remain a centerpiece of global strategy.
Hsiao Hsi-huei is a freelance writer.
Translated by Gilda Knox Streader
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