President Lai Ching-te of Taiwan sought to reassure citizens regarding a Taiwanese chip giant's plan to invest $100 billion in the United States, following concerns raised domestically after the announcement.
Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest chip manufacturer, revealed on Monday that it would expand its operations in Arizona over the next four years to produce chips for artificial intelligence and other high-tech applications. This move comes amid pressure from former President Trump for Taiwan to reduce its dominance in advanced semiconductors and relocate production to the U.S., with warnings of significant tariffs if demands are not met.
The announcement has sparked debate in Taiwan, where many view the chip sector as a crucial economic pillar and a defense against potential aggression from China, which claims Taiwan as part of its territory. TSMC's commitment raises its planned U.S. investment to $165 billion, more than double its previous commitments.
During a news conference in Taipei on Thursday, President Lai, alongside TSMC CEO C.C. Wei, emphasized that the plan would benefit TSMC, Taiwan, and the United States. Lai stated, “We have seen every time that with each initiative by TSMC, TSMC has grown even stronger and more competitive, while also providing Taiwan’s businesses with opportunities for international cooperation and contributing to Taiwan’s greater strength.” He expressed confidence in Taiwan's ability to expand its presence in the U.S.
Wei clarified that TSMC's decision was driven by business needs rather than political pressure, noting that the current expansion plan in the U.S. is insufficient to meet customer demand. He assured that production in Taiwan would not be adversely affected by the increased investment in the United States.
However, skepticism remains among some Taiwanese officials. Legislator Wang Hung-wei from the opposition Nationalist Party questioned the benefits for Taiwan, asking, “When TSMC invests so much capital and takes its most advanced manufacturing processes to the United States, what has Taiwan gained in return?”
TSMC executives have previously stated that the company would retain its most advanced factories in Taiwan, where it has established a robust network of specialized suppliers. Although TSMC has opened new factories in Japan and Arizona, its most cutting-edge chips continue to be produced in Taiwan.
The Taiwanese government is addressing complaints from Trump regarding Taiwan's defense spending, trade surplus with the U.S., and allegations of stealing the semiconductor business from American companies. A breakdown in relations with Trump could pose a crisis for Taiwan, which has relied on the U.S. for political and military support against threats from China.
Last month, Lai pledged to increase Taiwan's military spending to over 3 percent of its economic output, up from approximately 2.45 percent this year. Trump has suggested that Taiwan should allocate 5 to 10 percent of its economy to military expenditures.
Trump announced TSMC's new commitments alongside Wei at the White House on Monday, stating that the investment would help TSMC avoid tariffs on chips manufactured in Taiwan. The expansion will increase TSMC's operations in Arizona from three to six manufacturing plants, create 25,000 jobs, and establish a research and development center for production processes. Major customers include Apple, Nvidia, AMD, Qualcomm, and Broadcom.
Despite its global significance, TSMC has maintained a low profile in media interactions, with executives rarely addressing journalists. Wei remarked on the stress of recent engagements, stating, “Life has been a bit stressful lately, meeting two presidents in such a short time, and to also have to meet with friends from the media, and then answer questions.”