Taiwan President Lai Ching-te is hailing a planned $100 billion investment in the U.S. by the Taiwan Semiconductor Manufacturing Corporation as “a historic moment for U.S-Taiwan relations,” adding that the move is not the result of pressure imposed by the U.S. government.
The president and TSMC chairman C.C. Wei spoke to reporters at Taiwan’s presidential office in Taipei Thursday afternoon. Wei said the chipmaker’s latest U.S. expansion was driven by large customer demand, adding that its production lines there are already “fully booked” for the next three years.
“Whenever TSMC builds a production line in any location outside Taiwan, it is always driven by customer demand,” he said.
The $100 billion investment – which is separate from an investment of up to $65 billion in the U.S. that TSMC agreed to last April – calls for the construction of three new chip plants, two chip-packaging facilities and a research and development center in the western U.S. state of Arizona.
The president’s remarks come two days after Wei and U.S. President Donald Trump announced the chip giant’s expansion at the White House.
“We must be able to build the chips and semiconductors that we need right here,” Trump said during the press conference, adding that the move is “a matter of national security” for the U.S.
Wei said Thursday that TSMC also plans to build 11 new production lines in Taiwan this year, and the expansion in the U.S. won’t affect that timeline.
“We will continue to build production lines in Taiwan, and I have asked President Lai to help TSMC find new lands to build facilities,” he said.
TSMC has also built new facilities in Japan and Germany in recent years, a move that Lai said helps other Taiwanese businesses engage in international cooperation and increases Taiwan’s strength.
TSMC’s global expansion shows that “Taiwan’s industries have been moving westward, southward, and northward, and the strength that the industries have accumulated over the last few decades has helped Taiwan to confidently cross the Pacific Ocean and expand eastward to the American continent,” President Lai said during Thursday’s press conference.
Opposition not pleased
Despite the reassurances from Wei and Lai, TSMC’s expansion in the U.S. has prompted widespread concerns in Taiwan, with some opposition lawmakers saying TSMC’s expansion in the U.S. could hurt the island’s semiconductor industry and national security.
Fu Kun-chi, the legislative caucus whip from Taiwan’s main opposition party Kuomintang, or KMT, told journalists on Tuesday that TSMC’s additional investment in the U.S. could leave the island with “nothing to safeguard” if China militarily attacks Taiwan since Washington would possess the most advanced chip manufacturing processes.
Additionally, former Taiwan President Ma Ying-jeou, who is also with the KMT, has accused Lai of “selling” TSMC to the United States.
“Taiwanese people worry ‘the protector of the nation’ is going to move away and this is a major national security crisis that will have a major negative impact on Taiwanese people’s confidence, cross-strait relations and Taiwan’s geopolitical position in the future,” Ma wrote in a Facebook post on Tuesday.
Analysts say the opposition party’s rhetoric is part of its strategy to raise questions about U.S.-Taiwan relations.
“TSMC has been expanding their operations for quite some time, including in Japan and China, but the discourse of TSMC abandoning Taiwan only surfaces when the focus is on TSMC’s expansion in the U.S.,” said Lev Nachman, a political scientist at National Taiwan University.
“This is a sign that the discourse is more about trying to spread American skepticism than it is a genuine critique about TSMC and its intentions,” he told VOA by phone.
Other experts say that while the Taiwanese government is trying to counter the opposition party’s criticism by hosting a press conference on Thursday, the KMT’s arguments are raising doubts for some.
“Their efforts have achieved the intended goal because there is too much information for people unfamiliar with TSMC’s operations outside of Taiwan to comprehend,” said Chen Fang-yu, a political scientist at Soochow University in Taiwan.
“Even when TSMC completes all its overseas facilities by 2030, more than 80% of its productions will still remain in Taiwan, meaning that its overseas expansion won’t really affect Taiwan that much,” he told VOA by phone.
Defense spending still in question
Trump has repeatedly claimed that Taiwan has stolen semiconductor technologies from the U.S., Nachman said TSMC’s expansion in Arizona can help reduce potential friction between Taipei and Washington.
The additional investment “helps to assure the Trump administration that Taiwan is serious about doing what it takes to be friends with America,” he told VOA.
Despite this positive effect, Chen and Nachman both say Taiwan still faces pressure from the Trump administration to significantly increase its defense budget.
“Taiwan shouldn’t be celebrating because we saw Elbridge Colby echoing Trump’s sentiment during his Senate confirmation hearing that Taiwan needs to spend 10% of its GDP on defense,” said Nachman, adding that the Taiwanese government will feel a lot of pressure from Washington once Taiwan’s national defense comes back onto Trump’s radar.
To address the looming challenges, Chen said the Taiwanese government should demonstrate its willingness to purchase more weapons from the U.S. or lay out plans to deepen defense-related cooperation with Washington.
“Taiwan needs to show its determination to enhance its defense capabilities, and it needs to put forward some concrete numbers,” he told VOA.
