Taiwan denies taking its chip manufacturing industry from the U.S.

The world’s largest foundry, Taiwan Semiconductor Manufacturing Company Ltd., is better known by the acronym TSMC. Its largest customer is Apple as the foundry produces the tech giant’s A-series and M-series processors among other chips. It also does work for Qualcomm and MediaTek and many other fabless chip designers. While countries like the U.S. and China would love to become self-sufficient in this industry, the former might not be able to accomplish this due to the costs required to build a fab in the states. The latter has had sanctions placed on it by the former that prevent it from obtaining self-sufficiency in this space.

Taiwan’s economy minister Kuo Jyh-huei felt the need to make a statement today in Taipei denying comments made last month by Republican presidential nominee Donald Trump. The comment by Trump, who was quoted in the July 16th edition of Bloomberg Business Week, said, “Taiwan took our chip business from us. I mean, how stupid are we? They took all of our chip business. They’re immensely wealthy.”

“Of course Taiwan is not stealing the chip industry from the US. The chips we made are commissioned by U.S. companies, which still have the highest gross margin. Trump might have some misunderstanding on such matters, and we will clarify that.” Kuo Jyh-huei, Taiwan’s economy minister

Minister Kuo chalked up the issue to a misunderstanding on Trump’s part which he said will be clarified. When the Republican candidate’s comments were published in July, officials in Taiwan were concerned that if Trump were to regain the presidency, he might not be as committed to defending Taiwan from an attack by China. Beijing says that there is only one China and it isn’t Taiwan. A successful attack on Taiwan would also bring TSMC into that country’s fold.

TSMC is building three U.S. fabs in Arizona. | Image credit-TSMC

Because Taiwan officials fear that Trump bases his actions on transactional relationships, they are concerned that under a second Trump administration, the U.S. will back off pledges made by President Joe Biden to help defend Taiwan from China unless Taiwan pays the U.S. for protection. Trump has actually floated the idea of Taiwan paying the U.S. for protection from China, a suggestion that led Taiwain Premier Cho Jung-tai to say back in July, “It’s our shared responsibility and goal to maintain the peace and stability in the Taiwan Strait and the Indo-Pacific region.”

It should be noted that under the Trump administration, TSMC agreed to build multiple fabs in Arizona. The first one was supposed to start operating this year but a lack of skilled U.S. workers has pushed back the plant’s opening to 2025. That fab will turn out chips using the foundry’s 4nm (N4) process node. TSMC is expected to build a total of three fabs in Arizona.

The second fab is expected to open in 2028 and will produce cutting edge 3nm and 2nm chips. The third factory will be ready at the end of the decade and is expected to churn out 2nm or more cutting-edge chips. When completed, the fabs will be the most technologically advanced semiconductor manufacturing facilities in the U.S.

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