Taiwan Semiconductor Caught Between US Tariff Threats and Taiwan's Push To Keep Advanced Chip Tech

Taiwan’s government maintained that even after the latest investment, Taiwan would retain its most advanced semiconductor technology in the island country despite the new $100 billion deal (on top of its $65 billion investment) between the chip maker Taiwan Semiconductor Manufacturing Co TSM and Trump, the Guardian reports.

Contract chipmaker Taiwan Semi could find itself in a tight spot as geopolitical tensions intensified between Taiwan and Washington since Donald Trump became President of the U.S.

Trump had verbally attacked Taiwan for allegedly stealing U.S. semiconductor technology, leading to huge trade deficits for Washington.

Also Read: Applovin Reportedly Selling Gaming Unit To Tripledot Studios In $900-Million Deal

He also slammed Taiwan for the lack of a defense treaty between the countries as a key military backer of Taiwan against a potential invasion from China.

He threatened tariffs against Taiwan. Trump also suggested scrapping U.S. subsidies to chipmakers to build fabs in the country to boost its semiconductor position. It is noteworthy that Taiwan Semiconductor and Intel Corp INTC benefit from the subsidies the Biden administration launched during its tenure.

Taiwan’s government said the latest deal must undergo government assessments, which would factor in the country’s and investors’ interests. Trump said the deal indicated Taiwan Semiconductor could bypass the industry-wide 25% tariffs.

Taiwan Semiconductor was supposed to begin production of its most advanced 2-nanometer chip in its U.S. facilities from about 2028.

Government statements also suggested Taiwan Semiconductor had not yet applied for government approvals required for foreign investments of that size when the company announced the deal.

However, the Taiwan Minister of Economic Affairs, Kuo Jyh-Huei, emphasized to the Guardian that the office was fully informed of Taiwan Semiconductor-related investments in advance.

Prior reports indicated Taiwan’s government was trying to prevent Trump from imposing tariffs by sending delegations to Washington and pledging to boost defense spending and reduce its trade surplus.

However, Kuo told the Guardian that the deal was not influenced by tariff threats, citing its plants in Japan and Germany.

Price Action: TSM stock traded higher by 2.11% at $183.79 at the last check on Wednesday.

Also Read: