My Take | TSMC is the Taiwan DPP’s gift to the US that keeps on giving

At about the same time as a 7.3 magnitude earthquake hit near Hualien, Taiwan, early this month, the world’s largest manufacturer of semiconductors announced it planned to produce its most advanced chips in the United States.

The new commitment by Taiwan Semiconductor Manufacturing Co (TSMC) means it aims to start producing its latest 2-nanometre chips, and more advanced ones in future, in a new plant to be set up in Phoenix, Arizona. The new plant goes significantly further than its current plant, which is also located in Arizona, that will produce less advanced but more commercial chips. TSMC is also offshoring more production to Japan and Germany.

The latest chips – each can cost more than a state-of-the-art BMW model – is crucial to the development of artificial intelligence. Previously, TSMC said it would confine the most advanced chip production to Taiwan.

That has sometimes been referred to as “the silicon shield”, the protection that the island is supposed to enjoy as a global chip-making hub to deter Beijing from invading and destroying the hi-tech manufacturing sector.

TSMC is not the only one offshoring. Other Taiwanese chip-making groups and hi-tech firms are “consider[ing] overseas headquarters to hedge against Chinese attack,” according to the Financial Times.

“Global efforts to secure supply chains put pressure on [Taiwanese] contractors to establish ‘alternative command system abroad’.”