tsmc's $100 billion us expansion sparks tech tug-of-war

2025-03-04 tsmc

Taipei, Tuesday, 4 March 2025.
taiwanese authorities are working to ensure tsmc’s most advanced chip tech stays put, despite a massive $100 billion us expansion. this move is fueling concerns about potential tech transfer limits. analysts are watching closely. they are assessing the impact on tsmc’s global competitive edge. the expansion includes plans for five new factories in the us. the taiwanese government is trying to balance supporting global growth and safeguarding its strategic chip industry position. will tsmc be able to satisfy both taiwan and the us?

stock reaction and market concerns

The announcement of TSMC’s increased investment in the U.S. has triggered market apprehension [4]. On Tuesday, TSMC’s stock initially fell by 2.25% before recovering to a drop of less than 1% [4]. This volatility reflects investor concerns about the strategic implications of shifting production capacity [4]. The primary worry is that expanding in the U.S. might dilute Taiwan’s technological advantage and affect TSMC’s leading position in the global chip market [3][4].

taiwan’s strategic response

Taiwan’s government is carefully reviewing TSMC’s U.S. investment plans [4]. The government aims to balance supporting TSMC’s global expansion and protecting Taiwan’s crucial role in the semiconductor industry [4]. Officials have stated they will assist TSMC’s U.S. investments while ensuring the most advanced technologies remain in Taiwan [3][5]. This stance underscores the government’s commitment to maintaining Taiwan’s technological edge and national interests [5].

analyst perspectives on tsmc’s expansion

Analyst Lu Xingzhi suggests TSMC’s U.S. investment could be seen as securing a “four-year免死金牌 (immunity)” [6]. He notes that TSMC’s capital expenditure in the U.S. might surpass that of its Taiwan facilities [6]. Lu anticipates that TSMC’s CoWoS capacity and R&D will inevitably expand into the U.S. [6]. This shift could impact TSMC’s long-term gross margin, potentially hindering its ability to maintain a 53% or higher margin [6].

geopolitical considerations and supply chain dynamics

Legislator Shen Boyang emphasizes that TSMC’s investments in the U.S. won’t transform it into an “American TSMC” [7]. He views the expansion as a collaborative effort among democratic nations to share risks and build a non-red supply chain [7]. Shen highlights that the semiconductor industry is inherently multinational, involving cooperation in technology transfer and development [7]. Geopolitical factors, particularly concerns about chinese influence, are driving the push for diversified supply chains [7].

long-term implications and potential challenges

Legislator Ge Rujun points out that U.S. manufacturing costs are double those of Taiwan, and finding engineers is challenging [7]. He warns that TSMC might compromise to gain U.S. support, potentially leading to a decline in gross margins and increased concerns about industrial hollowing-out in Taiwan [7]. Ge urges the government to secure technology in Taiwan, strengthen its supply chain position, and accelerate local investments to diversify the industrial base [7].

tsmc’s global strategy

TSMC’s global expansion includes facilities in the U.S., Japan, and a new plant in Germany [3]. These expansions are seen as crucial developments, independent of tariffs, to serve local clients [3]. TSMC’s strategy aims to cater to specific regional demands, with U.S. manufacturing primarily for U.S. customers and Taiwanese manufacturing serving the rest of the world [3]. This approach seeks to minimize supply chain disruptions and maintain a competitive edge in diverse markets [3].

Bronnen

Chip Technology Taiwan Pressure