TAIPEI, TAIWAN — Chip giant Taiwan Semiconductor Manufacturing Co.’s (TSMC) decision to invest an additional $100 billion in the United States has drawn mixed reactions in Taiwan, but analysts view it as part of the company’s global strategy, potentially bolstering U.S.-Taiwan trade.
Largest single foreign direct investment in U.S.
“And just yesterday, Taiwan Semiconductor, the biggest in the world, most powerful in the world, has a tremendous amount — 97% — of the market, announced a $165 billion investment to build the most powerful chips on Earth, right here in the USA. And we’re not giving them any money,” Trump said during his March 4 address to Congress, underscoring the significance of what is now the largest single foreign direct investment in U.S. history.
On March 3, Trump and TSMC Chairman and CEO C.C. Wei jointly announced the investment at the White House. TSMC plans to invest an additional $100 billion in Arizona, constructing three wafer fabs, two advanced packaging plants and a research center.
TSMC’s total U.S. investment will be $165 billion, including a previously announced $65 billion in semiconductor production and R&D facility, Wei said.
Trump emphasized that TSMC’s move would help avoid steep tariffs on chips shipped to the U.S. while diversifying its “tremendous presence in another place and a very safe place.”
“We must be able to build the chips and semiconductors that we need right here,” Trump said. “It’s a matter of national security for us.”
Divided reactions in Taiwan
Taiwan’s Premier Cho Jung-tai said on March 4 that the government welcomes any investment that strengthens global competitiveness and supports industrial growth. He added that maintaining and strengthening Taiwan’s presence in the sector remains a shared goal of the government, the nation and the industry.
Taiwan’s Presidential Office spokesperson Kuo Ya-hui added that the government was fully informed about TSMC’s plan and would ensure that the company keeps its most advanced chip production in Taiwan.
However, former Taiwanese President Ma Ying-jeou called on current President Lai Ching-te to “immediately protect TSMC and stop internal division in Taiwan.”
He warned that TSMC’s expanded U.S. investment posed a “major national security crisis” that could negatively affect cross-strait relations and Taiwan’s geopolitical position.
Kuomintang lawmaker Ko Chih-en echoed the concern, questioning whether TSMC would become “American Semiconductor Manufacturing Co.” and whether Trump would relocate Taiwan’s most strategically important company that acts as a deterrent against China’s aggression.
Some social media users also criticized the move, leaving comments on Lai’s Facebook page accusing the Democratic Progressive Party of “selling out Taiwan,” reflecting skepticism toward both the government and TSMC’s decision.
A strategic move
Some analysts said that TSMC’s U.S. investment is not just about avoiding tariffs but part of its long-term global strategies.
Tsai Ming-fang, an industrial economics professor at Tamkang University, said U.S.‘s tariffs likely influenced TSMC’s decision, but the move could still benefit the company.
At the event, Wei thanked key customers including Apple and Nvidia, signaling their strong support of TSMC’s investment, Tsai told Voice of America (VOA), adding the move could also help reduce uncertainty in its relationship with the U.S. government.
“We have to acknowledge that the primary market for TSMC’s advanced chip manufacturing is still the United States,” he said. “The key issue is not whether TSMC was pressured into investing in the U.S., but whether this move remains beneficial for the company’s long-term profitability. That’s what needs to be closely watched.”
Liu Meng-chun, director of the First Research Division of Taiwan’s Chung-Hua Institution for Economic Research, said that while labor and operational costs in the U.S. are higher, the country offers advantages like ample land and the world’s largest semiconductor market. He described TSMC’s expansion as a strategic step to integrate global talent and resources.
“The first wave of Taiwan’s (enterprises) internationalization was just to invest in China. They did not learn how to operate internationally,” he said. “Under former U.S. President Joe Biden, Taiwanese businesses began shifting away from China, expanding into Southeast Asia, then Japan and Europe. Now, moving further into the U.S. is part of a broader effort to complete Taiwan’s unfinished lesson in internationalization, and it carries economic strategic value as well.”
TSMC’s U.S. investment can also benefit Taiwan’s exports, as the company may still need to source key components from Taiwan before securing local suppliers, Tsai said.
Core technologies remain in Taiwan
As many are concerned that TSMC may transfer its technologies overseas, Liu said the company will likely retain the most advanced 2-nanometer and 1.6-nanometer process nodes in Taiwan.
Additionally, TSMC’s U.S. R&D center — expected to collaborate with universities and research institutions — could strengthen its Taiwan operations by enhancing semiconductor competitiveness through supply chain integration and technology sharing, Liu said.
Implications for ASEAN’s semiconductor industry
TSMC’s investment has drawn global attention, particularly in Southeast Asia, where semiconductor is also a crucial sector.
According to the National University of Singapore’s Centre on Asia and Globalisation, ASEAN’s semiconductor exports grew 41.6% from $189.9 billion in 2018 to $268.8 billion in 2023, accounting for 23.6% of global exports.
Singapore plays a key role in semiconductor R&D and assembly, while Malaysia serves as a major hub for testing and packaging, holding nearly 13% of the market share. Penang, a Malaysian state located on the northwest coast of Peninsular Malaysia along the Strait of Malacca, is known as the “Silicon Valley of the East.”
However, Wong Chin Yoong, an economics professor at Malaysia’s Universiti Tunku Abdul Rahman, noted that most semiconductor firms in Malaysia are foreign-owned and focused on downstream operations, so TSMC’s U.S. expansion may not directly impact Malaysia’s industry.
A greater concern, he said, is whether Trump’s “America First” policies will siphon off U.S. investments in Malaysia and the ASEAN region.
“Aside from TSMC, Microsoft also recently announced major investments in the U.S.,” Wong told VOA. “The key question is whether companies that once considered expanding in Southeast Asia — Malaysia included — will now reconsider, affecting the region’s foreign investment inflow.”
Challenges in limited computing power
Southeast Asia also faces challenges in computing power, after the former Biden administration introduced a sweeping export control on advanced AI chips in January.
Wong said it remains unclear whether Trump would continue the measure, but maintaining technological competitiveness while navigating U.S.-China tensions will be a major challenge for Southeast Asian nations.
“For now, we can only wait and see,” he said. “But if the restriction persists, it could affect Malaysia’s ambition to become the region’s top data center. Also, ASEAN nations have traditionally remained neutral in global politics, balancing relations between the U.S. and China, but could be in a difficult situation if pressured to align with U.S. security demands.”
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