With President Donald Trump suggesting a 100% tariff on Taiwan-made semiconductors, a former executive of Taiwan Semiconductor Manufacturing Co. (TSMC) has said that Taiwan should be actively working with the US to enhance industrial cooperation.
If the tax credit goes ahead, both Taiwan and US companies will be impacted. Taiwan is said to produce around 90% of the world’s most advanced semiconductors.
Yang Guang-lei, former director of TSMC’s R&D Division and a former senior technical advisor to Intel, told TV network CAN that, given Taiwan has an extremely high share of the US semiconductor market, any supply disruption could have an adverse effect on US companies.
“Taiwan should consider how to build on its edge in semiconductor manufacturing and combine it with US strengths in innovation and applications to address that threat,” he added.
He also urged Taiwan to actively collaborate with the US to meet the challenges of global technology competition, including the possibility of transferring technology to the US and sharing its 30 years of semiconductor manufacturing expertise.
“The two sides could cooperate in areas of common development, such as integrating AI into semiconductor manufacturing, the manufacturing of military goods, and other niche market areas,” Yang said.
“Through cooperation, the US could gradually expand its manufacturing capabilities, while Taiwan could maintain its global advantage by fostering a mutually beneficial relationship with the US.”
Building a domestic supply chain
When the CHIPS and Science Act was signed into law in August 2022, one of the main aims of the initiative was to strengthen domestic semiconductor manufacturing.
According to a report from the Semiconductor Industry Association (SIA), US fab capacity is projected to increase by 203% by 2032, tripling US capacity. The US is also expected to increase its share of global fab capacity for the first time in decades, growing from 10% today to 14% by 2032.
The same report also predicts that the US will secure more than one-quarter (28%) of global capital expenditures between 2024 and 2032 – an estimated $646bn – an amount second only to Taiwan.
TSMC and the CHIPS Act
In November 2024, under the Biden-Harris Administration, TSMC signed a deal with the US Department of Commerce to support the construction of its third US semiconductor manufacturing facility in Phoenix, Arizona.
This involved $6.6bn in direct CHIPS Act funding and would increase the company’s total investment in the city to $65bn. The fab would be used to produce chips using 2nm or more advanced processes.
At the time, the department said it will disburse the funds based on TSMC Arizona’s completion of project milestones.
