TSMC’s $100B U.S. Investment: Strengthening Ties or Diluting Taiwan’s Chip Dominance?

March 5th 2025

TSMC’s recent $100 billion investment in the United States, announced alongside former U.S. President Donald Trump, signals a massive expansion of semiconductor manufacturing on U.S. soil. The company plans to build three new fabs, two advanced packaging plants, and an R&D center - a move designed to secure U.S. market access, strengthen ties with American clients, and avoid high tariffs on chip exports.

However, while some analysts argue this move enhances TSMC’s global leadership, others worry it may gradually erode Taiwan’s dominance in semiconductor production. Taiwan currently holds over 90% of the world's advanced chip production, but this share could shrink to 75-80% as Arizona fabs ramp up.

Additionally, higher operational costs, talent shortages, and cultural adaptation challenges in the U.S. could strain profitability. Yet, Taiwan’s well-established supply chain, clustering advantages, and lower labor costs are expected to keep it the heart of TSMC’s cutting-edge chip production.

The debate reflects broader concerns about semiconductor geopolitics - as countries push for domestic manufacturing independence, will Taiwan maintain its strategic edge, or will this be the first step in a slow shift of power?

Source: Taiwan News