Taiwan Semiconductor Manufacturing Company (TSMC) has received government support to continuously expand its wafer fabrication and packaging plants in Taiwan and around the world. Experts believe that TSMC’s decision to keep the most advanced 2-nanometer technology in Taiwan while diversifying its global presence helps to resist the threats posed by the Chinese Communist Party and strengthens the safety of the Taiwanese people.
TSMC, a leading player in semiconductor foundry, is actively expanding its chip plants in Hsinchu, Taichung, Kaohsiung, Chiayi in Taiwan, as well as in Arizona in the United States, Kumamoto in Japan, and Dresden in Germany. The US Department of Commerce announced on April 8 that it will provide TSMC with a $6.6 billion subsidy for advanced semiconductor production in Phoenix, Arizona, and offer up to $5 billion in low-cost government loans. TSMC also revealed plans to establish its third wafer plant in Arizona to meet rising customer demands through the most advanced semiconductor manufacturing technology in the United States.
Taiwan’s Vice President Lai Ching-te met with the “US Congressional Delegation led by Debbie Lesko” on October 8, expressing gratitude for the visitors’ support in solidifying the Taiwan-US partnership. Lai mentioned that Representatives Lesko and Biggs from Arizona, wish TSMC’s plans in Arizona progress smoothly.
Wang Hsiu-wen, Assistant Research Fellow at the Taiwan Ministry of National Defense’s think tank and the National Defense Institute’s Institute of Chinese Communist Military and Operational Concepts, analyzed to Epoch Times that TSMC’s establishment of advanced 5-nanometer, 4-nanometer, and 3-nanometer wafer plants in Arizona is part of a global strategy. From the perspective of Americans, this move helps to diversify risks because it contributes to the “Made in America” semiconductor industry, thus boosting local employment.
Wang noted that TSMC retains the most advanced 2-nanometer technology in Taiwan and leverages the semiconductor industry cluster in western Taiwan, a unique advantage that other countries cannot replicate. This serves as an economic security guarantee for Taiwan. Additionally, TSMC’s global presence enables it to access top talents in major countries, offering promising prospects for its development.
As the Chinese Communist Party (CCP) remains unwilling to abandon the option of using force against Taiwan, national security units recently learned of the CCP’s plans to conduct military exercises around Taiwan after the National Day celebrations in the Republic of China. Wang pointed out that due to Taiwan’s leadership in global semiconductor foundries with companies like TSMC, the CCP hesitates to launch missiles at Taiwan because doing so would damage the equipment and high-tech talent in Taiwan’s semiconductor industry. In the event of TSMC engineers being killed, even a short-term Chinese occupation of Taiwan would not be able to restore Taiwan’s semiconductor capabilities.
Wang further analyzed that Taiwan refers to TSMC as the “Guardian Mountain for the Country” with good reason, given that TSMC and other semiconductor industries have made Taiwan a crucial region, making it challenging for CCP to target Taiwan with missiles. Therefore, CCP’s strategic approach towards Taiwan must change to block Taiwan or resort to grey-zone warfare tactics such as psychological operations using fifth-column spies or cognitive warfare to compel Taiwan to surrender.
Premier Su Tseng-chang of Taiwan stated in a media interview on October 8 that in response to the CCP’s military threats against Taiwan, various security monitoring measures will be heightened. He hopes that the CCP will exercise restraint in actions that disrupt regional stability in the Indo-Pacific. Taiwan will prepare itself, with military units thoroughly understanding and monitoring all processes to prevent any threats to the people.
Wang emphasized that TSMC’s presence deters the CCP from easily resorting to military action against Taiwan, making Taiwan an essential strategic location for the United States. Since the Korean War, the US has been clear about the importance of safeguarding peace and stability in the Taiwan Strait, deterring the CCP from crossing any redlines. Particularly now, the US recognizes the criticality of TSMC and will not allow the CCP to take over Taiwan.
Looking ahead, Wang believes that TSMC will maintain a leading advantage globally over the next ten years. TSMC’s chip production relies on Electronic Design Automation (EDA) software from the United States for chip designs, major raw materials are supplied from Japan, and Deep Ultraviolet lithography machines for mature chip manufacturing processes come from the Netherlands. Therefore, global collaboration is crucial for the success of the semiconductor industry.
In recent years, with the restructuring of global supply chains, Wang highlighted that the global semiconductor supply chain is now categorized into non-red and red chains. In October 2023, the US announced regulations prohibiting US artificial intelligence chip manufacturer Nvidia from exporting advanced chips to the CCP. Following this, in January, Dutch chip equipment manufacturer ASML announced the withdrawal of permits for exporting equipment to China, including lithography machines. In March, the US government further tightened these restrictions, stifling the CCP’s semiconductor technology advancement.
During the pandemic, the world witnessed the importance of TSMC, raising Taiwan’s international profile and consequently elevating Taiwan’s international political status, causing concern for the CCP. Wang added that the future applications of Artificial Intelligence (AI) and High-Performance Computing (HPC) will drive robust demand for advanced semiconductor manufacturing processes and packaging, further solidifying the positive outlook for TSMC. While some companies still invest in China, Wang reminds that joining the non-red supply chain is essential for a promising future.