Introduction
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, must obtain government approval before entering TSMC’s Overseas Ventures, according to Taiwan’s Economy Minister, Kuo Jyh-huei.
The statement, made on Thursday, reinforces Taiwan’s control over its critical semiconductor industry while ensuring that cutting-edge chip technology does not fall into the wrong hands—particularly China.
“No one can shake the foundations of Taiwan’s semiconductor industry. We have to have confidence in TSMC, and the government will fully support the ‘sacred mountain protecting the country.’”
— Kuo Jyh-huei, Taiwan Economy Minister
TSMC, a key supplier to tech giants like Apple and Nvidia, has been at the center of U.S.-China tensions over semiconductor dominance.
Recent reports suggest that TSMC is in talks to acquire a stake in Intel, though neither company has confirmed the discussions.
Amid growing concerns from the U.S. over Taiwan’s semiconductor supremacy, the new regulations could shape global chip investments in the years ahead.
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Key Takeaways
TSMC’s Needs Government Approval: Any overseas ventures outside Taiwan requires the approval of the Taiwanese government.
China Restrictions Remain: Taiwan continues to prohibit its companies from producing advanced chips in China.
U.S. Investment Continues: TSMC has already committed $65 billion to semiconductor manufacturing in Arizona.
U.S.-Taiwan Trade Tensions: The Trump administration has criticized Taiwan’s semiconductor dominance and threatened tariffs.
Taiwan’s Strategic Response: The Taiwanese government is gathering data to negotiate better trade conditions with the U.S.
Background: Taiwan’s Semiconductor Dominance
Taiwan plays a crucial role in the global semiconductor industry, controlling over 60% of the global foundry market, with TSMC alone holding a 53.6% market share as of 2024.
The company produces some of the most advanced chips, powering AI, high-performance computing, and consumer electronics.
TSMC’s dominance has made Taiwan a strategic focal point in global geopolitics, with the U.S. pushing to bring more semiconductor manufacturing onshore.
Washington has invested billions through the CHIPS and Science Act, hoping to reduce reliance on Taiwanese chipmakers.
Samsung Struggles with 2nm process Yields as TSMC Outpaces in Advanced Technology — techovedas
Taiwan’s New Approval Policy
Speaking to reporters in Taipei, Economy Minister Kuo Jyh-huei stated that TSMC must seek government approval for any overseas joint ventures.
This move ensures that Taiwan retains control over its most valuable industry, preventing foreign influence or technology leakage.
While the new policy applies to all international investments, China remains the only country where Taiwan completely bans advanced chip production.
TSMC’s U.S. Expansion and Intel Rumors
TSMC is already making major investments in the U.S., with $65 billion committed to semiconductor fabrication plants in Arizona.
These fabs will eventually produce 2-nanometer chips—the most advanced semiconductor nodes—though they are not expected to be operational until at least 2027.
Additionally, U.S. media reports suggest TSMC is in discussions to acquire a stake in Intel. While neither company has confirmed these talks, an investment in Intel could strengthen U.S.-Taiwan semiconductor ties.
However, any such deal would now require approval from the Taiwanese government.
U.S.-Taiwan Semiconductor Trade Tensions
The U.S. has increasingly pressured Taiwan to shift more semiconductor production to American soil.
Former President Donald Trump has criticized Taiwan for “taking away” U.S. semiconductor business, advocating for domestic chip production.
Trump has also threatened broad tariffs in Taiwan, citing the country’s large trade surplus with the U.S.
Taiwan’s government is currently gathering data to negotiate better trade terms with Washington, though no official details have been released.
Why Taiwan is Protecting TSMC
Taiwan’s government considers TSMC a “sacred mountain” that protects the country’s economic and technological future.
The chip industry accounts for 15% of Taiwan’s GDP and over 35% of its exports. The government’s approval requirement ensures:
- Technology Security: Preventing Taiwan’s advanced semiconductor tech from falling into foreign control.
- National Economic Stability: Keeping TSMC’s profits and expertise within Taiwan’s borders.
- Global Competitiveness: Maintaining Taiwan’s edge in semiconductor manufacturing.
What’s Next for TSMC and Global Chip Investments?
Despite new regulations, Taiwan is unlikely to block TSMC’s U.S. investments, as they align with global strategic interests. However, any major acquisition—such as a stake in Intel—will now be closely scrutinized.
With AI chip demand skyrocketing, semiconductor companies, including Nvidia, AMD, and Intel, are increasingly dependent on TSMC.
Taiwan’s tighter control over overseas investments could affect future collaborations and reshape the semiconductor supply chain.
Conclusion
Taiwan’s decision to require government approval for TSMC’s overseas ventures underscores the strategic importance of the semiconductor industry.
As the U.S. and China compete for chip dominance, Taiwan is reinforcing its control over its most valuable asset.
The move comes at a time of growing U.S.-Taiwan trade tensions, with potential tariffs looming. As semiconductor investment continues shifting, Taiwan’s policies will play a crucial role in shaping the future of global chip manufacturing.
