Japan Expansion Adds A Geopolitical Hedge

The chipmaker's plan to make advanced chips in Japan would help the company spread production beyond Taiwan, giving it more protection against shifting U.S. tariff policy and the risk of a potential China-led blockade around the island, analysts said.

Analysts said a larger Japan footprint could keep part of Taiwan Semiconductor's supply chain insulated from U.S. import tariff swings.

They pointed to President Donald Trump lowering tariffs on Taiwanese imports to 15% from 32% after Taiwan Semiconductor committed $165 billion for advanced chipmaking in Arizona, while the White House later announced a 25% global tariff on certain advanced computing chips on January 14.

College of Asia-Pacific Studies dean Yoichiro Sato told SCMP Taiwan Semiconductor would not easily give up the "silicon shield" concept even under tariff threats, while independent tech analyst Sean Su said the Japan buildout helps Taiwan Semiconductor offset concentration risk given how much capacity still sits in Taiwan.

U.S. Buildout Accelerates, But Advanced Share Stays Limited

Taiwan Semiconductor is ramping up its Arizona expansion, but analysts expect only a small portion of its most advanced chip production to move to the U.S. before President Donald Trump's second term ends.

Economist Lien Hsien-ming said fewer than 15% of the chipmaker's cutting-edge manufacturing processes are likely to relocate stateside, pushing back on U.S. Commerce Secretary Howard Lutnick's goal of shifting 40% of Taiwan's supply chain to the U.S. by 2029.

TSM Price Action: Taiwan Semiconductor shares were up 1.40% at $335.36 during premarket trading on Friday. The stock is approaching its 52-week high of $351.33, according to Benzinga Pro data.

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