President Trump’s plan for Taiwan’s leading semiconductor company to invest $100 billion into new semiconductor facilities in Arizona has divided politics here in Taiwan. Opposition politicians worry it could damage the “silicon shield” that many believe helps keep Taiwan safe from a Chinese attack.
Opposition Kuomintang (KMT) lawmaker and chief whip Fu Kun-chi, the day after the deal was announced, asked “If TSMC turns into ‘American Semiconductor Manufacturing Company’, where will Taiwan’s security be then?”
In a Facebook post, former President Ma Ying-jeou, also of the KMT, accused Taiwan’s current President Lai Ching-te of “selling” TSMC to Trump, calling it a “major national security crisis.”
Taiwan’s “silicon shield”
The “silicon shield” is a metaphor for how Taiwan’s role as a key global supplier of high-tech goods may help ensure its own geopolitical safety. The Chinese and the American economies rely heavily on imports of advanced semiconductors from Taiwan.
Indeed, Taiwan produces 60 percent of the world’s semiconductors. Therefore, both nations have some stake in avoiding a conflict that could endanger the flow of vital chips.
Both leaders worried publicly that TSMC – and Taiwan’s government, which owns the largest stake in the company – could end up gambling away that advantage.
Two days after announcing last week of the investments while standing alongside Trump, TSMC’s CEO CC Wei flew back to Taipei to host a press conference alongside Taiwan’s President, Lai Ching-te, emphasizing that the company’s most advanced semiconductor technologies would remain in Taiwan.
“We understand this type of negotiation takes place behind closed doors, but now that it’s over, we request our government to reveal the whole process that led up to TSMC making the announcement with President Trump,” opposition KMT lawmaker Ko Ju-chun says.
A more transparent framework for explaining these negotiations is crucial, he says, to avoid damage to Taiwan’s “silicon shield” in the future.
Semiconductor expert Darson Chiu, the director-general of the Confederation of Asia-Pacific Chambers of Commerce and Industry, observes both former President Biden and Trump “want to make sure that the semiconductor supply chain will be consolidated and will not have to deal with external threats, such as from mainland China.”
Onshoring would help the U.S. cut its reliance on Taiwan. Chiu says on the other hand, Taiwan’s priority is to make sure that its own key role in the supply chain doesn’t disappear – or American willingness to defend it may decrease.
