TSMC: The Taiwanese Shield Changes Shape

On March 3, 2025, TSMC announced the launch of its 100 billion US dollar investment plan in the United States. This plan, intended for Arizona, will serve to expand the company''s industrial site in the US state, where three foundries are already operational. In a context of tariff inflation since the return of Donald Trump to the presidency, these new investments must be read alongside the changes facing the Taiwanese Silicon Shield since the Chips and Science Act. Here is a look at the latest news from the largest player in the vital semiconductor market, Taiwan Semiconductor Manufacturing Company.

Founded in 1987 in Taiwan by Morris Chang, TSMC is the fruit of a national ambition to modernise and specialise in a promising industry, semiconductors. Today essential, this technological mastery gives Taiwan a "Silicon Shield", vital amid tensions with the People''s Republic of China. Yet behind this success lies significant US investment. Since the Covid crisis and the disruption of many supply chains, the United States has begun repatriating its assets. With this in mind, the 2022 Chips and Science Act was signed to concentrate US investment on US soil, in order to guarantee economic security, ensuring stable supply and employment opportunities. It is therefore within this framework that Taiwan has seen a growing demand to relocate part of its activities to US soil. This 100 billion dollar investment, following an initial 65 billion, therefore marks the erosion of this national shield under US pressure.

This announcement is also important in the context of tariff tensions between the United States and its trading partners. As a reminder, the Trump administration is currently pursuing an economic policy aimed at raising customs duties against its trading partners, whether border countries like Canada and Mexico, or transatlantic partners. When TSMC president C. C. Wei announced this investment after a meeting with Donald Trump on March 3, the latter welcomed it and commented on the deal: "This investment will create thousands of very well-paid jobs", before Commerce Secretary Howard Lutnick added: "Companies come here to invest a lot of money because they want to be in the world''s largest market, and they want to avoid the customs duties they would face if they were not based here".

However, this investment must be put in perspective. First, it is not a matter of investing 100 billion in 2025 alone, but rather starting this year over a four-year period. The authorities of Arizona will therefore have to wait before seeing a new industrial park emerge on this scale. Furthermore, this operation should not be assimilated to a genuine relocation. Indeed, in order to protect its shield, TSMC fully intends to keep its most precious factories on Taiwanese soil. In this way, China, highly dependent on this industry, could be reluctant to consider resorting to the use of force. Taiwanese Prime Minister Cho Jung-Tai confirmed the intention to see Taiwan retain its key role in the semiconductor industry, at the cutting edge of artificial intelligence, which is highly dependent on semiconductors. However, in order to satisfy American ambitions, TSMC has chosen to approach Intel in order to revive the US company whose difficulties had fuelled President Trump''s resentment towards Taiwanese competitors. Indeed, after the meeting of March 3, TSMC''s management has chosen to propose a co-management of Intel''s foundries to US semiconductor companies, namely Qualcomm, Advanced Micro Devices and Broadcom.

If this operation were to truly come to fruition, a split of Intel''s foundries could take place between these companies, reviving a US giant while ensuring a potential shelter for TSMC against the wrath of the new US administration.