Trump's Taiwan comment could come back to hurt the U.S. chip industry
A comment made by President-Elect Donald Trump months before the election could come back and have a negative impact the U.S. chip industry. In the July 16th edition of Bloomberg Business Week, Trump was quoted as saying, "Taiwan took our chip business from us. I mean, how stupid are we? They took all of our chip business. They’re immensely wealthy. That led Taiwan's economy minister in September to deny Trump's comments and note that chips made by TSMC are commissioned by U.S. companies.
But there seems to be a larger backlash here from Taiwan as the country has reportedly put a halt on any plans TSMC had to build 2nm chips out of the country. Even though TSMC would like to produce 2nm chips away from it's home country, the Taiwan government has "forbidden" the foundry from building 2nm chips outside of Taiwan and that includes the United States. TSMC will start mass producing 2nm chips in Taiwan in 2025,
TSMC is expected to start manufacturing chips next month at its fab in Arizona using its 4nm/5nm nodes. By the end of the 2020s, the foundry was hoping to build 2nm chips in the U.S. although by then the industry will be well past the 2nm node for smartphone application processors. Even so, if Taiwan-U.S. relations are strained in any way it is not going to help make the U.S. self-sufficient in the semiconductors industry, a goal that surely President-Elect Trump would like to see.
TSMC is expected to open its U.S. fab in Arizona during the first week of December. | Image credit-TSMC
While he still will be president-elect in December, Trump will supposedly be joining current U.S. President Joe Biden at the opening of the TSMC fab in Arizona. The factory is expected to hold the event during the first week of December. Biden's CHIPS and Science Act enacted in 2022 helped provide subsidies and support toward the building of the fabs. Despite wanting a strong U.S. domestic chip industry, Trump is not a fan of the CHIPS Act which he might repeal once he returns to the White House.
Adding to all of this drama, TSMC originally made the decision to build fabs in Arizona during the first Trump administration. Thus, both Biden and Trump should appear together when TSMC opens its first fab in Arizona since both played huge roles in the construction of the factories.
Many U.S. companies, including Apple and Nvidia, depend heavily on TSMC. As a result, it is hard to see any deterioration in the relationship between the U.S. and Taiwan although anything could happen over the next few years.
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