Recent claims by a Taiwanese official highlight the necessity of TSMC’s strategic investments in the United States, aimed at maintaining a competitive edge and fulfilling customer demands.
Essential Moves by TSMC to Secure the US Market
TSMC’s expansion into the US market has sparked skepticism among Taiwanese citizens and officials, who view it as a potential ‘technology transfer’ to the US. With major clients like NVIDIA, AMD, and Apple based in America, US policy and conditions are critical for TSMC. Reports suggest that former EU envoy Roy Chun Lee described TSMC’s move as a strategy to divert US government attention from Intel, marking it as a significant business decision.
If Taiwanese people oppose TSMC’s investment in the US and demand that it remain in Taiwan, Lee Chun said that would damage the trust between TSMC and its customers, and the US might then go all out to support Intel. “We shouldn’t force others to support TSMC’s competitor.”
– Ctee (Machine Translated)
TSMC’s influence over the US chip industry underscores the necessity of its investments to ensure a reliable supply chain, crucial for American clients. Talks of a substantial $165 billion investment began under President Biden’s administration, driven by the semiconductor industry’s shift to US-based production lines. Another element of this strategy was to prevent Intel from gaining dominance.
The Impact of TSMC’s US Expansion on Industry Dynamics
Had TSMC declined to invest in the US, it would have faced significant tariffs, forcing companies like NVIDIA and Apple to explore in-house alternatives. Intel, although capable of producing advanced nodes in the US, finds itself relegated to an ‘alternative’ rather than a ‘primary’ option due to TSMC’s expansion. TSMC’s strategic presence in America is poised to challenge Intel’s aspirations in the chipmaking sector.
TSMC’s investments have yielded substantial success, with plans to advance to cutting-edge nodes, such as the A16 (1.6nm), and establish new facilities in the US to meet client demand effectively.