tsmc faces us investment: taiwan's 'national shield' at risk?
Taipei, Saturday, 23 August 2025.
reports suggest the trump administration weighed investing in tsmc. this sparked concerns in taiwan about forced technology transfers. the move follows intel subsidies under the chips act. taiwanese officials fear impacts on tsmc’s crucial role. some analysts believe the us aims to control tsmc, calling it ‘open robbery’. tsmc considered returning subsidies to avoid us equity. however, tsmc chairman mark liu confirmed the us will not invest. this quelled fears of tsmc becoming a ‘us chip company’.
market reaction and stock performance
Initial reports of potential US investment in TSMC shook stock markets [2]. Taiwan’s stock market fell sharply on August 20, 2025, decreasing by 728 points [4]. This marked the sixth-largest drop of the year [4]. The market value decreased by 2.3 trillion New Taiwan dollars [4]. TSMC’s stock price also experienced a decline [4]. However, following confirmation that the US government would not invest, TSMC’s American Depositary Receipts (ADR) rebounded strongly [3]. On August 23, 2025, TSMC’s ADR closed at $232.99, up $5.66, a 2.49 2.49% increase [5]. This is equivalent to NT$1425.20 per share in Taiwan [5].
chips act implications and strategic considerations
The US government’s interest in TSMC stems from the CHIPS Act, designed to bolster US competitiveness in the semiconductor market [4]. US Commerce Secretary Howard Lutnick stated the Trump administration is considering requiring chip manufacturers receiving subsidies, including TSMC, to provide equity to the US government [4]. TSMC, however, is wary of government intervention that could distort market dynamics [2]. The company is carefully evaluating its strategic options in response to these developments [2]. TSMC received $6.6 billion in subsidies from the US government and committed to investing $100 billion in the US, including $65 billion for three factories in Arizona [2].
geopolitical risks and manufacturing capacity
Concerns over potential US investment highlight the geopolitical risks associated with semiconductor manufacturing [4]. Analysts predicted increased volatility in semiconductor stocks due to these tensions [4]. The US Commerce Secretary previously stated the US cannot rely on Taiwan to manufacture chips [1]. This underscores the strategic importance of TSMC’s manufacturing capacity and its role as a ‘national shield mountain’ for Taiwan [1]. Despite these concerns, TSMC continues to expand its manufacturing footprint in the US, with ongoing discussions about financial support and incentives [5].
analyst perspectives and future outlook
Industry analysts suggest the US government might use various means to influence TSMC [4]. These include equity investments or other forms of control [1][4]. Some experts view potential US actions as an attempt to openly control Taiwan’s strategic assets [1]. However, TSMC’s Chairman, Mark Liu, has confirmed that the US government will not invest in TSMC [3]. This announcement has eased immediate concerns about US influence over the company [3]. Despite this, the situation remains fluid, and TSMC’s strategic decisions will continue to be closely watched [2].