Taiwan is expressing significant concern over TSMC’s global expansion, notably in the United States. As TSMC shows increasing interest in expanding its operations overseas, particularly with the backing of the new U.S. administration aiming to boost the domestic chipmaking industry, Taiwan is keen on keeping its core technology within the country.
The government is actively working on implementing laws to ensure that cutting-edge technological processes remain exclusively in Taiwan. Reports indicate that an amendment to Article 22 of the Industrial Creation Ordinance has been passed to retain critical technology within Taiwanese borders. The “N-1” policy, led by Premier Cho Jung-tai, permits foreign TSMC facilities to produce technology that is one generation behind what is manufactured in Taiwan. Additionally, any foreign investments by Taiwanese companies that could pose a national security risk may be entirely blocked. This legislation is anticipated to take effect by late 2025.
Historically, Taiwan has maintained a strict stance against transferring technology abroad, opposing domestic companies’ expansions into other nations. However, the current scenario suggests a shift, with Taiwan allowing companies like TSMC to operate in the U.S. while still safeguarding their leading-edge production capabilities to uphold their dominance in chipmaking.
In terms of TSMC’s plans in the U.S., the Arizona facility is poised to produce 1.6nm technology by 2030, currently focusing on 4nm production. With new facilities and a research and development center in the U.S., TSMC is clearly strategizing for long-term operations. Taiwan appears to be comfortable with this arrangement, ensuring that they remain the leaders in producing exclusive semiconductors.
