A surprise announcement at the White House last week saw Taiwan Semiconductor Manufacturing Company (TSMC) unveil a $100 billion investment, which US President Donald Trump hailed as coming from the “world’s most powerful company.” However, the mood was far from celebratory in Taiwan. The news reignited fears that the island’s semiconductor industry could fall under increasing US influence due to political pressure. Taiwan’s former President Ma Ying-jeou swiftly condemned the deal, accusing the ruling Democratic Progressive Party (DPP) of effectively “selling TSMC” to Trump as a “protection fee.” He warned that this move could endanger Taiwan’s future.
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TSMC manufactures over 90% of the world’s advanced microchips, which power everything from smartphones to military technology. Many in Taiwan view these chips as a “silicon shield” against a potential Chinese invasion. As tensions with Beijing escalate, particularly regarding Taiwan’s sovereignty, some fear that Trump’s rhetoric could signal a shift in US foreign policy. Taiwan’s President Lai Ching-te reassured the public that TSMC’s investment in the US would not affect its operations back home. This statement aimed to calm fears that Taiwan could lose its strategic advantage in the global chip market.
Despite reassurances, many Taiwanese citizens remain concerned. Retiree Tammy Chao expressed fear that Taiwan could become a pawn in Trump’s political dealings, similar to his approach with Ukraine. Chao likened the situation to Trump’s dealings with Ukrainian President Volodymyr Zelensky, where Trump’s rhetoric suggested that Taiwan, too, might soon be left with “no cards to play.” Others, such as finance professional Fred Lin, took a more pragmatic view. Lin suggested that TSMC’s decision was necessary in the context of global geopolitics, with many countries “paying protection fees to the US.”
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This development raises difficult questions about the future of US-Taiwan relations. Although TSMC’s new investment in Arizona is seen as a smart business move, analysts worry about the broader impact on Taiwan’s security. The growing pressure on Taiwanese firms to invest in the US could diminish Taiwan’s leverage in the global chip market. Some experts suggest that companies like TSMC may have to balance meeting US demands with maintaining their commitments to Taiwan, further complicating the island’s position on the global stage.
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