It was a surprise ceremony in the White House chaired by President Donald Trump to reveal an investment of $ 100 billion of what he called the world's most powerful company, Taiwan Semiconductor Manufacturing Company (TSMC).
But almost 8,000 miles away, the mood was far from festive. Instead, the shock announcement last week housed the fears in Taiwan about losing his crown jewel, the world-complaining semiconductor industry, to the US for political pressure.
The former president of the Island Democracy Ma Ying-Jou did not waste time to accuse the prevailing Democratic Progressive Party (DPP) of “Selling TSMC” to Trump as a 'protection costs'.
“This is a major national security crisis,” wrote Ma, a member of the opposition Kuomintang (KMT), on March 4 on his Facebook page shortly after the White House signs. It will “have a significant negative influence on people's confidence, cross-trait Relations and the future geopolitical position of Taiwan.”
To reassure the public, the Taiwan president Lai Ching-Te appeared last week together with TSMC CEO CC Wei at the presidential office of Taipei and said that the American investment of the company would not undermine his home base in his home base.
TSMC produces more than 90% of the world's advanced microchips, which drive everything from smartphones and artificial intelligence to weapons. That is why many in Taiwan believe that global dependence on his semiconductors serves as a 'silicon shield', a deterrent against a potential Chinese invasion.
The ruling communist party of China claims Taiwan as part of his territory despite the fact that he never checked it and has sworn to take control of the self -controlling island, if necessary by violence. Beijing has escalated his military activities around Taiwan in recent years, regularly flying fighter jets and execution of exercises in waters near the island.
A screen in Beijing shows news images of military exercises led by the Chinese people liberation army around Taiwan on October 14, 2024. – Tingshu Wang/Reuters
'Ukraine today, Taiwan tomorrow'
Taiwan relies on American military and political support. According to the Taiwan Relations Act, the US is legally obliged to provide Taiwan with the means to defend itself against a possible attack by China.
But Trump's recent rhetoric has expressed uncertainty about the future of relationships between US-Taiwan. He has repeatedly accused Taiwan of 'stealing' the American semiconductor industry, a claim that is disputed a lot, while he says that Taiwan has to pay the US for 'protection'.
For many on the self-controlling island, the expression “Ukraine today, Taiwan Tomorrow” is increasingly resonated in recent weeks, while they watch Trump in the US for a long time by playing Kremlin rhetoric and warming of Moscow, alienating the traditional European allies and Kyiv. Taiwanese see parallels between their democracy and Ukraine, with both confronted with existential threats of aggressive, expansive neighbors.
Earlier this month, Washington abruptly suspended military aid to Ukraine after a heated exchange between Trump, vice -president JD Vance and the Ukrainian President Volodymyr Zensky in the White House, only a few hours after the cheerful TSMC ceremony. It restored the help this week after Ukraine had accepted a 30-day-in-the-US Stakes-Fire-Furdish. The White House has also printed Zolensky to sign a deal that gives the US access to Kyiv's untouched mineral riches.
Tammy Chao, a retired, expressed deep concern about CNN about the security of Taiwan after the announcement of TSMC, in which Trump's approach was compared with his treatment of Ukraine. She described him as a 'dealer' that Taiwan could eventually treat as a negotiating ship.
'Taiwan, fairly quickly just like [what] He said to Zensky: “You don't have cards to play,” and Taiwan won't have any cards to play, “she said. “TSMC was the best card.”
But others seem less concerned. Fred Lin, a professional in the financial industry, said he believed that TSMC came to this decision carefully.
“Who does not pay protection costs to the US? It is undoubtedly a form of protection costs that we can understand, but that is the reality of international politics, “he said.
TSMC headquarters in Hsinchu, Taiwan, in 2024 -I -HWA Cheng/AFP/Getty Images
However, Trump administration officials have also said that they should inject involvement in European safety to concentrate on Asia – and the threat of China. Prior to his election, Vance was explicitly in his concern that the American support for Ukraine was helping Taiwan to help Taiwan with a Chinese attack.
Researchers say that there are limits on comparisons between the safety conditions of Ukraine and Taiwan and believe that the safety of the island is influenced by several factors outside the semiconductor industry, including the broader gopolitical ambition of China and the strategic location of Taiwan.
Whether China takes military action against Taiwan will eventually be driven by his core interests, which are not only dependent on the role of the island in the worldwide chip production, said min-Yen Chiang, a non-resident fellow at the Research Institute for Democracy, Society and Emerging Technology, a government-funded by the government.
He referred to the time in 1950 when the US sent its seventh fleet to the Taiwan street during the Korean war to scare China to invade Taiwan. The strategic move by the then President Harry Truman neutralized the street of Taiwan and ensured that the Korean war did not cause a broader conflict, which maintained stability in the Asia-Pacific region.
“Taiwan did not have a semiconductor industry at all,” he said.
Still dedicated
Last week, President Lai said that Taipei was “not busy from Washington” at the closing of the TSMC deal, which, according to the company, was the largest such investment in the US ever made by a non-American company.
Wei agreed with him and attributed the increased investment to “strong question” of American customers such as Apple, Nvidia, AMD, Qualcomm and Broadcom who wanted to reduce potential supply chain risks by having chips made locally.
TSMC received $ 6.5 billion in subsidies for the first three factories in Arizona under the Bipartisan Chips Act, under the leadership of the Biden Administration, which has assigned $ 39 billion in federal financing to stimulate domestic semiconductor production.
“We are the best where we build our Fabs,” Wei added, referring to manufacturing plants of semiconductors.
Together with the extra three production facilities, the new investment also promised two chip packaging factories and a research and development center to improve production process technology.
Wei clarified that the development of the advanced chipping technology of the next generation would remain in Taiwan and would still be 10 times greater than the American facilities.
Semiconductor analysts welcomed the company to make a “agile” decision.
TF International Securities Analyst Ming-Chi Kuo praised TSMC in an online analysis and called it “most successful non-American company in negotiations with the Trump administration.”
“Although the investment of $ 100 billion seems enormous, the lack of details offers the flexibility for expenditure based on future circumstances, so that the impact on profitability is mitigated,” wrote Kuo.
According to Eric Chen, an analyst at DigiTimes Research, the investment of TSMC has usually relieved Trump's concerns, a market research agency. “But of course we have no way to know when Trump could change his attitude is notorious to make sudden U-turns,” he said.
An electronic waffle is displayed in the TSMC Museum of Innovation in Hsinchu, Taiwan, in 2024. – I -HWA Cheng/AFP/Getty Images
He added that TSMC was 'not afraid' that Trump might be deleting the subsidies from the Chips Act, and emphasized that the decision of the company to invest in the US was driven by the needs of the customer.
Armor
TSMC's investment of $ 100 billion marks the last one in a wave of companies committed huge amounts to the US. But it stands out as one of the first major foreign companies that do this, and Trump claims that there are more of such investments on the road.
In contrast to the approach to his predecessor Biden to stimulate domestic investments through subsidies, Trump prefers the rates. So far it has proven to be effective.
Trump has previously threatened to impose 25% rates on semiconductors, together with cars and pharmaceutical products in next month. When announcing the investment of TSMC, trade secretary Howard Lutnick said that the company chose to expand in the US due to the threat of rates and received no extra subsidies.
At the end of February, Apple promised $ 500 billion to expand facilities, production and projects in the US in the next four years. Oracle, OpenAi and Softbank announced in January that they would invest $ 500 billion to create a new company that would build artificial intelligence infrastructure in the US.
With the new investment of TSMC in the US, it is expected that Trump will appear on other large companies, said Chang-Tai Hsieh, an economist at the Booth School of Business of the University of Chicago.
He said that it exerts extra pressure on Samsung and Intel, the other two major producers of computer use and AI chips in the world.
SK Hynix in South Korea, another important player in memory chips, together with Samsung, is also expected to feel the pressure. Samsung has previously promised to invest $ 37 billion in Texas, while SK Hynix announced plans to build a Chip packaging factory of $ 3.87 billion in Indiana last year. Samsung and SK Hynix refused to comment.
Hsieh said it is clear that companies such as TSMC and others must “do what they can do to make Trump happy.” But he also warned of the risks related to such concessions.
“As soon as you agree to blackmail, there is no end,” he said.
Simone McCarthy from CNN has contributed reporting.
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