Taipei (AFP) – Taiwanese chipmaking giant TSMC’s plan to invest $100 billion in the United States was a “historic moment” for Taiwan-US ties, the island’s President Lai Ching-te said on Thursday. TSMC, which counts Apple and Nvidia among its clients, announced the plan this week after US President Donald Trump threatened to impose tariffs on overseas-made chips. It will take the total amount the world’s biggest chipmaker has pledged to invest in the United States to $165 billion, which TSMC said was the “largest single foreign direct investment in US history”.
Lai hailed the “historic moment for Taiwan-US relations” at a joint news conference with TSMC chairman and chief executive C.C. Wei at the Presidential Office. It followed Trump’s accusations that Taiwan stole the US chip industry and his threats to impose tariffs of up to 100 percent, as well as Taipei’s promises to invest more in the United States. TSMC has long faced demands to move more of its production away from Taiwan, with fears that supplies of the critical technology could be disrupted in any conflict with Beijing.
China has upped military pressure on Taiwan in recent years to press its claim of sovereignty over the self-ruled island, where TSMC has its headquarters and the bulk of its fabrication plants. Trump recently ratcheted up the pressure on TSMC and other chip manufacturers by publicly mulling the introduction of tariffs of 25 percent, or higher, on all chips made outside the United States.
– US demand ‘extremely high’ – Lai said on Thursday the government was not pressured by Washington “during TSMC’s US investment process”. Wei said TSMC’s expansion was driven by growing demand from US clients and that it would not affect the company’s investments in Taiwan. TSMC planned to build 11 new production lines in Taiwan this year to meet demand, Wei said, adding “our production capacity is not enough”.
“Whenever TSMC builds a production line in any location outside Taiwan, it is always driven by customer demand,” Wei said. “We went to Japan because of Japanese customer demand, to Germany because of German customer demand, and four years ago to the US because of American customer demand,” he said. “Now, we are increasing our investment because the demand from US customers is extremely high.”
– ‘Taiwan’s TSMC’ – Taiwan is a global powerhouse in semiconductor manufacturing, with more than half of the world’s chips and nearly all of the high-end ones made there. The concentration of chip manufacturing in Taiwan has long been seen as a “silicon shield” protecting it from an invasion or blockade by China — and an incentive for the United States to defend it.
TSMC’s new $100 billion investment sparked concerns that Trump was trying to take control of the company’s production and that its growing US footprint could weaken Washington’s willingness to protect Taiwan. Premier Cho Jung-tai said earlier on Thursday “TSMC is ‘Taiwan’s TSMC'” and the company’s production capacity and advanced technology were “rooted in Taiwan”.
© 2024 AFP
