The US and TSMC have had a complex relationship for years. For this Taiwanese semiconductor manufacturer, the oldest on the planet, the country led by Donald Trump is crucial because a significant portion of its best clients is American . Companies like Nvidia, Apple, AMD, Broadcom, and Qualcomm, among others, rely on the chips designed in the lithographic nodes of TSMC. However, this relationship has a stark duality.
Currently, the USA finds itself in a position where it cannot afford to operate without TSMC . Intel, an American company, has advanced lithography nodes but the competitiveness of its Taiwanese rival is challenging to match. TSMC has cemented its leadership through advanced integration technologies and substantial production capacities, achieving remarkable performance per wafer. The US government is acutely aware of the strength of TSMC and its significance to the aforementioned American companies.
Regardless, TSMC’s origins in Taiwan carry a weighty disadvantage. Over the years, Donald Trump has voiced his concerns regarding foreign manufacturers. He notably stated in late January, “In the very near future, we will impose tariffs on foreign production of computer chips, semiconductors, and pharmaceutical products to bring the manufacture of these essential goods back to the US […] They went to Taiwan; now we want them to return. We do not want to give them billions of dollars in the ridiculous Biden plan. They already have billions of dollars.”
The Best TSMC Defense Against the Trump Administration is Top Technology
Trump’s explicit reference to Taiwan was undoubtedly a strategic nod toward TSMC. While there are other semiconductor manufacturers in Taiwan, such as UMC (United Microelectronics Corporation) and PSMC (Powerchip Semiconductor Manufacturing Corporation), their relevance in the global chip market pales in comparison to TSMC, which controls about 60% of the integrated circuits market . This dominance makes TSMC a formidable player in the global semiconductor landscape.
<img alt="To survive, Intel must compete with an unstoppable TSMC. Selling its chip factories now makes more sense than ever" width="375" height="142" src="https://i.blogs.es/bb69d4/intel-ap/375_142.jpeg"/>No matter what happens in the future, the Trump administration will struggle to catch TSMC off guard.
Regardless of future developments, the Trump administration will find it extraordinarily challenging to catch TSMC off guard. This company has been strategically extending its semiconductor manufacturing infrastructure beyond Taiwan’s borders for over four years. This expansion serves two crucial purposes: it protects the business against potential conflicts between China and Taiwan, and it enhances TSMC’s operational capabilities within the US market. However, this ambitious strategy goes further.
A report from the Taiwan Economic Daily reveals that TSMC plans to establish a state-of-the-art semiconductor plant to produce 1 Nm chips . This facility will be based in Tainan and will be called ‘Fab 25’. It will utilize 12-inch wafers and will incorporate six production lines, with large-scale manufacturing set to start in 2030. While this timeline may appear distant, it is actually quite pressing.
Typically, the construction of a cutting-edge chip factory takes at least three years, followed by the crucial optimization of 1 nm production nodes by TSMC engineers. Whether the company will successfully achieve its goals remains to be seen. However, one thing is indisputable: the most effective defense against potential regulatory measures from the Trump administration is maintaining the best technology in the semiconductor sector.
Image | TSMC | Gage Skidmore
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In Xataka, we see how Intel was on the verge of snatching Apple from TSMC as a client. If successful, this would have marked a significant turning point in their competitive dynamics.