The annual global semiconductor event, SEMICON Taiwan 2026, took place from September 2nd to 4th at the Nangang Exhibition Center in Taipei, with over 1,300 companies, 4,300 booths, and industry professionals from 65 countries gathering in Taiwan.
As the demand for chips worldwide rises rapidly due to AI advancements, Taiwan Semiconductor Manufacturing Company (TSMC) continues to expand its presence in the United States, Japan, and Europe, raising a key question: Is TSMC’s globalization aimed at diversifying risks, expanding Taiwan’s industrial influence, or gradually diluting Taiwan’s strategic value?
Several experts interviewed by Epoch Times stated that TSMC’s globalization will not dilute Taiwan’s importance. They emphasized that Taiwan’s strategic value lies not only in chip production capacity but also in its core position as the “brain” of AI and its highly intelligent, hardworking, and flexible workforce. However, the lack of energy self-sufficiency remains Taiwan’s, and TSMC’s, biggest crisis.
Regarding concerns about whether TSMC’s globalization would diminish Taiwan and shift the supply chain ecosystem overseas, Lien Hsien-ming, president of the Chung-Hua Institution for Economic Research, recently pointed out on Facebook that the rapid growth in global semiconductor demand driven by AI means that TSMC is not relocating capacity from Taiwan to the US. Instead, it is expanding local capacity in Taiwan while also increasing overseas capacity.
Lien further explained that increased investments in the US do not equate to decreased investments in Taiwan. As global demand surges due to AI, TSMC’s expansion reflects an overall scaling-up where Taiwan and overseas capacities complement each other rather than simply trading off.
TSMC Chairman Mark Liu has publicly stated that strong demand for AI chips is expected to continue until 2029-2030.
External concerns that TSMC might turn into “USMC” are dismissed by Lien, who emphasized that TSMC’s expansion is primarily a response to increased AI demand rather than a detachment from Taiwan. Taiwan remains a crucial production and technological base in TSMC’s global strategy.
Veteran political and economic commentator Wu Chia-lung supported this view, saying that considering TSMC’s overseas investments as diluting Taiwan overlooks the rapid expansion of the semiconductor industry due to AI demand.
According to data released by the Taiwan Ministry of Economic Affairs in July this year, TSMC operates a total of 19 advanced foundries and packaging plants in Taiwan with process nodes below 5nm, and 13 more are under construction. Overseas, only 2 advanced process factories are under construction (Arizona and Japan), indicating that Taiwan remains TSMC’s key site for advanced processing.
Wu noted that TSMC’s irreplaceability hinges on competitors’ ability to match its technology, yield, manufacturing capacity, and industry ecosystem rather than the number of overseas facilities. Intel, Samsung, and Chinese companies have yet to replicate TSMC’s complete competitive advantage.
However, Liu Pei-chen, researcher and director of the Taoyuan Institute of Economic Research, warned that globalization comes with its own costs. While TSMC’s US investments align with major customers and the “US manufacturing” policy and provide access to overseas resources and talent, pressure from the US for accelerated and large-scale investments may impact Taiwan’s existing industry clustering effect in the medium to long term.
She stressed the need for Taiwan to maintain its core research and development capabilities domestically and retain a generational advantage in advanced processing technologies compared to overseas competitors.
Another core issue in TSMC’s global strategy is whether Taiwan’s indispensability will gradually decline with TSMC plants in the US, Japan, and Europe. TrendForce estimates that TSMC’s 3 overseas fabs will not start mass production until after 2030 and that by 2035, the US share of TSMC’s capacity will only rise to 6%, while Taiwan’s capacity will remain between 80% and 86%, highlighting its continued importance as a manufacturing base.
In response, Liu noted that as overseas capacities ramp up beyond 2030, Taiwan’s share in TSMC’s global production may decline. The strategic deterrence effect of Taiwan’s highly concentrated capacity may undergo changes in the face of expanding overseas production.
“It’s not just about the quantity of production. Taiwan’s strategic value must be built on more than just numerical capacity.”
Liu emphasized the need for Taiwan to shift strategies, such as becoming the core “brain” for US AI developments. Deepening technological and economic ties between Taiwan and the US can make Taiwan an indispensable link in the American AI industry and global technology supply chain.
Over the past 30 years, from personal computers, the internet, smartphones, to the current global AI wave, Taiwan has consistently played an irreplaceable role in the global tech landscape.
MediaTek’s Vice Chairman and CEO, Rick Tsai, in a keynote dialogue at the SEMICON summit, dissected why Taiwan continues to create high value-added competitive advantages.
“Taiwan combines a rare cultural trait in the world: we are highly flexible, exceptionally smart, and extremely hardworking,” Tsai pinpointed the essence of Taiwan’s supply chain.
Moreover, Xue Zongzhi mentioned that globally, only TSMC can manufacture AI chips, down to 3nm and 2-plus nm, with Intel in pursuit. However, Intel’s continued efforts to catch up reveal that human resources are the crucial factor: “It’s all about the people!”
Xue pointed out that the semiconductor industry does not solely rely on investment capital for replication. Despite Taiwan’s limitations in land, water, and electricity, it has built the most complete wafer manufacturing capabilities globally due to its long-term cultivation of talents.
“When it comes to semiconductors, it’s an extremely precise process,” Xue said, noting that constructing a TSMC fab is vastly different from a standard factory. Special regulations and construction methods are essential. Even a construction company responsible for Taipei 101 cannot replicate a TSMC fab.
Semiconductor manufacturing relies heavily on stable electricity and water supply.
Former TSMC purchasing manager Xue emphasized that semiconductor production is highly sensitive to power interruptions. Even voltage dips can result in significant losses as production lines halt and wafers become unusable. Therefore, power supply stability is TSMC’s most significant risk.
Ajit Manocha, Global President and CEO of SEMICON, highlighted at this year’s event that around 70 fabs are under construction globally, including many data centers, leading to immense energy challenges.
During a meeting with President Tsai Ing-wen, she assured that Taiwan’s power supply wouldn’t be an issue at least until 2035.
President Tsai’s recent proposal to restart nuclear power plants represents a response to the increasing energy demand from the tech industry and the goal of achieving net-zero carbon emissions by 2050, all for energy self-reliance.
However, multiple think tank reports reveal that most of Taiwan’s energy is imported, and in case of a blockade in the Taiwan Strait, energy supply could last between 14 days, 40 days, or even several months, depending on the extent of power restrictions.
In light of this, Wu Chia-lung stated that Taiwan’s greatest national security vulnerability lies in the lack of energy self-sufficiency. In the event of a blockade or conflict leading to an energy supply disruption, Taiwan’s semiconductor industry would face severe challenges.
He suggested that Taiwan needs to reevaluate its energy policies from a national security perspective, including enhancing energy resilience and strategic reserves of critical resources like oil, natural gas, and coal.
“Taiwan should reassess energy policy from a national security standpoint,” Wu said, emphasizing the need to bolster energy resilience and strategic reserves of key resources like petroleum, natural gas, and coal.