The Taiwan administration isn't pleased at all with TSMC's global expansion, especially in the US, as they are now pursuing formal law to keep core technology in the country.
TSMC Won't Be Allowed To Produce Cutting-Edge Nodes In Foreign Facilities; Taiwan Now Has The Right To Block Deals
With the Trump 2.0 administration taking office, we have seen firms like TSMC show huge interest in the region, mainly since the new government is committed to reviving the domestic chipmaking industry. Trump, with his "tariff technique", has managed to attract TSMC to invest over $100 billion in the nation, but the growing influence of the US has apparently made Taiwan officials worried, who are now pursuing an amendment in the law to ensure that the production of the latest-generation of processes remains exclusive to Taiwan, instead of going to a foreign entity.
According to Taiwan media sources, it is claimed that Article 22 of the Industrial Creation Ordinance has been passed, which primarily focuses on retaining core technology. Taiwan's Premier Cho Jung-tai has adopted the "N-1" policy, which means they'll allow foreign TSMC facilities to produce one node, which is one generation behind relative to Taiwan. Apart from this, it is claimed that if foreign investments by any Taiwanese organization prove to hinder national security, they could be blocked entirely. The legislation is expected to come into effect by late 2025.
Interestingly, before this law, Taiwan had zero tolerance for technology transfer, given that the country was against domestic companies expanding into other nations. But now, it seems like Taiwan has shown openness towards companies like TSMC operating in countries like the US, but it still wants to retain the production of cutting-edge nodes to maintain its status as the dominant chipmaker, so it is safe to say that TSMC won't have many issues operating in the US, given that it still gives Taiwan the right to produce "exclusive" semiconductors.
What we know about TSMC's US plans is that the Arizona facility is expected to produce up to 1.6nm (A16) by 2030, while the fab is currently responsible for 4nm production. The Taiwan giant is also opening new facilities and a dedicated R&D center in the US, so it is safe to say that TSMC is playing the "long-ball" game when it comes to US operations, and Taiwan apparently seems okay with it.
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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