- TSMC announced a $100 billion investment with Trump
- Taiwan fears losing control of its semiconductor industry
- Former Taiwanese President criticized the deal as a "protection fee
A surprise ceremony at the White House, led by President Donald Trump, unveiled a $100 billion investment from Taiwan Semiconductor Manufacturing Company (TSMC), which Trump described as the world’s most powerful company.
However, 8,000 miles away in Taiwan, the mood was far from celebratory. The announcement reignited concerns about Taiwan losing control over its prized semiconductor industry to the US, partly due to political pressures. Former Taiwanese President Ma Ying-jeou quickly accused the ruling Democratic Progressive Party (DPP) of “selling TSMC” to Trump as a “protection fee.”
“This is a major national security crisis,” Ma, a member of the opposition Kuomintang (KMT), wrote on Facebook after the White House signing event. He warned it could have serious negative effects on public confidence, cross-strait relations, and Taiwan’s future geopolitical position.
In response, Taiwan President Lai Ching-te, along with TSMC CEO CC Wei, reassured the public by saying the company’s US investment would not diminish its commitment to Taiwan or affect its planned expansion there.
TSMC manufactures over 90% of the world’s advanced microchips, which are used in everything from smartphones to military systems. Many in Taiwan see the global reliance on these semiconductors as a “silicon shield,” providing deterrence against potential Chinese aggression. Despite Taiwan’s democratic status, China claims the island as part of its territory and has vowed to take control, potentially by force. Taiwan relies heavily on US military and political support, especially under the Taiwan Relations Act, which obligates the US to assist Taiwan in defending itself from China.
However, Trump’s recent statements have cast doubt on the future of US-Taiwan relations. He has repeatedly accused Taiwan of “stealing” the US semiconductor industry, a claim widely disputed, and suggested Taiwan should pay the US for “protection.”
The phrase “Ukraine today, Taiwan tomorrow” has increasingly resonated in Taiwan, as many see parallels between the two countries, both facing threats from expansionist neighbors. Recently, Trump’s stance on Ukraine, including a suspension of military aid and tensions with Ukrainian President Volodymyr Zelensky, raised fears that Taiwan could be next in line to face a similar approach.
Some Taiwanese, like retiree Tammy Chao, expressed concerns about Taiwan’s security, worried that Trump could eventually treat Taiwan as a bargaining chip. Others, like finance professional Fred Lin, viewed TSMC’s decision to invest in the US as a necessary move in international politics, with the US imposing protection fees on many nations.
Researchers note that Taiwan’s security situation is shaped by various factors beyond its semiconductor industry, including China’s broader geopolitical ambitions. Min-yen Chiang, a fellow at the Research Institute for Democracy, Society, and Emerging Technology, pointed out that Taiwan’s security has historically been influenced by strategic US military actions, such as the 1950 deployment of the US Seventh Fleet to deter China from invading Taiwan.
TSMC’s new investment includes three manufacturing facilities, two chip packaging plants, and a research center in the US. Despite the investment, TSMC’s cutting-edge chipmaking technology will remain in Taiwan, and the company’s expansion plans there are still significantly larger than in the US.
While TSMC’s decision has softened some of Trump’s concerns, analysts like Eric Chen warn that Trump’s unpredictable nature could lead to sudden shifts in policy. The $100 billion investment is part of a broader trend of foreign companies committing substantial sums to the US, with Trump positioning this as part of his strategy to reduce reliance on European security while focusing on China’s threat in Asia.
Trump’s approach, relying on tariffs rather than subsidies, is seen as effective in pushing companies to invest in the US. TSMC’s investment was partly driven by the threat of tariffs, according to Commerce Secretary Howard Lutnick, while Apple, Oracle, OpenAI, and SoftBank have also committed to large investments in US facilities.
Economist Chang-Tai Hsieh at the University of Chicago warned that the pressure on companies like TSMC, Samsung, and Intel to satisfy Trump’s demands could lead to risks in the long run. “Once you agree to blackmail, then there’s no end of it,” he cautioned.
