Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the world’s leading contract chipmaker, must obtain government approval before entering into any overseas joint ventures (JVs), Taiwan’s Minister of Economic Affairs J.W. Kuo (郭智輝) stated on Monday. While TSMC has the freedom to expand internationally, strict regulations prevent it from producing its most advanced semiconductor chips in China due to national security concerns and Taiwan’s strategic interest in maintaining its technological edge.
Speculations on TSMC-Intel Joint Venture
Recent US media reports have suggested that TSMC is in talks with Intel Corp. regarding a potential stake acquisition or collaboration. However, neither company has officially confirmed these discussions. This speculation has gained traction in light of former US President Donald Trump’s statements accusing Taiwan of dominating the semiconductor industry at the expense of US businesses. Trump has repeatedly emphasized his desire to bring semiconductor manufacturing back to the United States.
Despite these reports, Minister Kuo reassured the public that Taiwan’s semiconductor sector remains secure and unshaken. He emphasized that TSMC, often referred to as Taiwan’s “sacred mountain,” remains a cornerstone of the country’s economic and technological dominance.
Government Oversight and Approval for Overseas Investments
While the Taiwanese government supports TSMC’s global expansion, Kuo clarified that major overseas investments require government authorization.
“For TSMC to go into the world and have a joint venture in any location, it definitely needs government permission,” Kuo stated.
This requirement ensures that Taiwan retains control over its critical semiconductor industry, preventing foreign influence that could compromise its economic and national security interests. Although there are no restrictions on TSMC producing its most advanced chips overseas (except in China), any such moves must receive prior approval from the Ministry of Economic Affairs.
TSMC’s $65 Billion Investment in US Chip Plants
TSMC has been making significant investments in the United States, particularly in Arizona, where it is building a $65 billion semiconductor fabrication facility. The Taiwanese government has granted permission for 2-nanometer chips, which will be among the most advanced semiconductors, to be produced at these new facilities. However, these chips are not expected to be manufactured in the US for several years.
This expansion aligns with the US government’s push to reduce dependence on Asian semiconductor manufacturing and strengthen its domestic supply chain for critical technologies.
Taiwan’s Trade Relations with the US and Potential Tariffs
Taiwan enjoys a large trade surplus with the United States, mainly due to its dominance in semiconductor exports. However, former President Donald Trump has hinted at imposing wide-ranging import tariffs to address trade imbalances. If re-elected, these tariffs could impact Taiwan’s economic relationship with the US and pose challenges for its major technology firms, including TSMC.
In response, Minister Kuo stated that the Taiwanese government is actively gathering data to prepare for potential negotiations with US officials.
“We are collecting information for government negotiators to discuss with the Trump administration on the tariffs issue and to seek the best conditions for Taiwanese companies,” Kuo said.
However, he refrained from providing further details on the ongoing trade discussions.
TSMC plays a pivotal role in the global technology supply chain, producing cutting-edge chips for major companies like Apple, Nvidia, and AMD. Taiwan’s dominance in this sector has led to geopolitical tensions, particularly as China seeks to reduce its reliance on Taiwanese semiconductors.
To maintain its leadership, Taiwan strictly controls its semiconductor investments in China, preventing the export of leading-edge chip technology. This policy aims to protect Taiwan’s intellectual property and prevent China from closing the technological gap in advanced chip manufacturing.
Meanwhile, TSMC’s expansion into the US and other regions is part of its strategy to diversify production, enhance its global presence, and meet growing demand for high-performance computing and AI chips.
While TSMC continues to expand internationally, its global partnerships and investments remain subject to government oversight. Taiwan’s semiconductor policies ensure that the nation retains control over its most valuable industry, preventing foreign entities from gaining strategic leverage.
As the US-China technology rivalry intensifies, Taiwan’s role in the global semiconductor industry remains crucial. With TSMC at the forefront, Taiwan is committed to balancing economic growth, national security, and technological leadership while navigating complex international relations.
