TSMC has been investing heavily in the US to establish a supply chain; however, laws in Taiwan hinder the chip giant's production of cutting-edge nodes in America.
The U.S. Might Never Have Access To TSMC's Cutting-Edge Nodes, Given the Resistance From Taiwan
Taiwanese lawmakers and experts have expressed concern over TSMC's inclination to invest in the US over the past few years, primarily due to the opinion that such efforts would lead to technology transfer, thereby undermining Taiwan's position in the semiconductor industry. Recently, based on a report by CNA, Taiwanese lawmakers questioned the current adminstration on the policy of Taiwan when it comes to TSMC producing offshore processes, to which the deputy science minister Fa-cheng Lin reiterated the nation's "N-2" commitment, which means that the US would always be two generations behind Taiwan in terms of producing chips.
For example, if TSMC develops 1.2nm or 1.4nm technologies in Taiwan, it will be allowed to export 1.6nm technologies. He pointed out that most of TSMC's R&D personnel are in Taiwan, and the company complies with relevant regulations.
- CNA
One of the major reasons the Trump administration, along with US-based fabless manufacturers, is pushing TSMC to expand its operations in America is to ensure that the chip supply chain is safeguarded from geopolitical tensions and that the supply of cutting-edge chips isn't affected in any manner. Apart from the 'tariff pressure' mounted by the USG, TSMC has seen massive interest from US clients in terms of what it is producing in Arizona, which is why the chip giant has plans to scale up its investments to a whopping $300 billion. However, despite such massive attempts, the US will not gain access to cutting-edge chip technology before Taiwan, or alongside it.
For now, TSMC is preparing to expand its Arizona facility by integrating 3nm production lines, which will come under HVM by 2027, but by then, Taiwan will be looking to shift towards the A16 (1.6nm) technology, after the potential successful ramp-up of the N2 (2nm) process. TSMC still aims to comply with the "N-2" policy set by Taiwanese lawmakers, which indicates that the US must continue to make efforts to ensure that core technologies are developed and produced domestically. This, of course, requires extensive R&D, fabrication equipment, and talent onboard, but it is likely the only path towards a resilient supply chain.
The analyst Dan Nystedt mentions that with TSMC being reluctant to shift high-end nodes to the US, Intel might see a massive opportunity opening up, given that the foundry builds and produces the technology in its home grounds, and this is also one of the reasons why Team Blue sees massive interest in the 14A node. Supply chain dynamics could favour Intel Foundry, given that TSMC retains its core technologies abroad; however, this is too early to say for now.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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