Taiwan’s government has promised its most advance semiconductor technology will not be moved to the US under a new $100bn (£79bn) deal signed between the chip maker TSMC and Donald Trump, amid accusations that it is allowing the island’s national security to be undermined.
The government said the deal must still go through government assessments, which would take into account the interests of the country as well as investors.
The surprise announcement on Monday by Trump and the chief executive of Taiwan Semiconductor Manufacturing Co (TSMC), CC Wei, has prompted controversy and confusion in Taiwan, where the industry is crucial to its economy and national security.
Trump said the deal meant TSMC would avoid the industry-wide 25% tariffs amid efforts to bring more manufacturing to the US and assert US trade dominance over rivals and allies. Wei said the deal meant TSMC was “producing the most advanced chip on US soil”.
That statement has been called into question by pledges from government officials that the tightly protected tech would stay onshore. The presidential office spokesperson Karen Kuo, said the government would ensure TSMC “will keep its most advanced manufacturing processes in Taiwan”.
But the specifics of any restrictions are unclear. In November, Taiwanese officials and media said TSMC would begin production of its most advanced 2-nanometer chip in its US facilities from about 2028. Asked if this was still the case, officials referred the Guardian to comments by economics minister on Tuesday, saying “next year, 2nm and 1.6nm [chips] will not be produced in the US”.
TSMC and the ministry of economics have been contacted for clarification.
Government statements also suggested TSMC had not yet applied for government approvals required for foreign investments of that size, when the deal was announced. The Taiwan minister of economic affairs, Kuo Jyh-Huei, said that assessment would “take into account the interests of investors and the country”.
“Taking away Taiwan’s technology sector will reduce the power of Taiwan’s’ ‘silicon shield’,” said James Yifan Chen, the assistant professor in the department of diplomacy and international relations at Tamkang University in Taiwan. “Taiwan without semiconductor and tech industries will be like Ukraine without nuclear weapons.”
The deal drew criticism from the opposition in Taiwan. The leader of the KMT’s legislative caucus, Fu Kun-chi, asked “Where is Taiwan’s national security if TSMC become ASMC and the sacred mountain that protects the country is gone?”
“The more TSMC produces in the US, the lower Taiwan’s geopolitical importance will be, and the less incentive the US will have to help Taiwan in the future,” said the KMT legislator Ko Ju-Chun.
