TSMC’s Investments in the United States Were Necessary to Maintain Leadership and Meet Customer Demand

TSMC’s growing investments in the United States have sparked skepticism among some Taiwanese citizens and officials, many of whom view the expansion as a potential technology transfer risk. Concerns have intensified as TSMC’s presence in Arizona expands to multiple fabs and advanced node production. However, according to Taiwan’s former EU envoy Roy Chun Lee, TSMC’s decision to invest heavily in America was not only strategic but also necessary for safeguarding the company’s competitive position and customer relationships.

In a report published by the Taiwanese outlet Ctee, Roy Chun Lee explained that one core reason behind TSMC’s decision to build manufacturing facilities in the United States was to divert political and regulatory pressure away from Intel. He noted that if Taiwan were to oppose TSMC’s United States expansion and demand all production remain within Taiwan, it would erode customer trust and potentially push the United States government to significantly increase its support for Intel. As Lee put it, “We should not force others to support TSMC’s competitor.”

This viewpoint underscores the deep interdependence between TSMC and its major clientele. The majority of TSMC’s customer base consists of American technology giants, including NVIDIA, AMD, and Apple. These companies rely on consistent access to cutting edge process nodes, and many have advocated for manufacturing capacity closer to United States soil to mitigate supply chain risks. From that perspective, TSMC’s United States expansion was not a concession but a requirement for maintaining strategic trust.

The report also highlights that discussions surrounding TSMC’s massive one hundred sixty five billion dollar investment began during the Biden administration, amid wider United States policy movements aimed at reshoring semiconductor manufacturing. The strategic intent was to capitalize on global sentiment favoring onshore production and to anchor the semiconductor supply chain within the United States. For American companies, a local TSMC presence strengthens resilience. For TSMC, it secures continued access to the market that forms the backbone of its revenue.

If TSMC had opted not to invest in United States manufacturing, the consequences would have been considerable. The company would face higher tariffs, and its key partners such as NVIDIA and Apple would be forced to explore in house chip production or seek alternatives. The reality is that within the United States, Intel remains the only other manufacturer capable of producing advanced process nodes. Without a TSMC presence, the United States government would likely escalate its support for Intel to secure domestic access to cutting edge semiconductor fabrication.

By expanding into the United States, TSMC effectively prevented Intel from being positioned as the primary national champion for advanced semiconductor manufacturing. Instead, Intel becomes an alternative rather than the preferred option for most American companies, delaying or diminishing Intel’s ambitions to reclaim process leadership.

So far, TSMC’s United States investments have been a major strategic success. The company has already confirmed plans to ramp up production to advanced nodes, including the forthcoming A16 (1.6 nanometer class). Additionally, TSMC is preparing to expand its American presence with new facilities that will support increasing demand from its key clients and broaden its manufacturing footprint.

TSMC’s global influence continues to shape semiconductor policy on both sides of the Pacific. While debates persist within Taiwan regarding the long term implications of overseas expansion, it is clear that TSMC’s decision to build manufacturing capacity in the United States was not optional, but essential to maintaining its industry domination and protecting its customer ecosystem.

What are your thoughts on TSMC’s strategy? Does expanding into the United States strengthen Taiwan’s semiconductor leadership, or does it create new long term risks? Share your view below.