Earlier this month, Taiwan’s biggest chipmaker reportedly took a step that sparked discussion around the world: holding its first board meeting on American soil.
The event would be a symbolic move by Taiwan Semiconductor Manufacturing Co. (TSMC), a sign of the company’s commitment to manufacturing microchips in the United States. And its timing could not have been better.
Just days before, US President Donald Trump had railed against Taiwan’s world-beating semiconductor factories, complaining that they “took our chip business away” and warning “we want that business back”.
To push chipmakers to shift production to the US, Trump has threatened to slap tariffs of 25 per cent on shipments of foreign-made semiconductors – and introduce even higher duties if necessary.
Taiwan is in the US president’s crosshairs because of its dominance of global chipmaking. The island accounted for 76.8 per cent of the world’s wafer production, packaging and testing in 2024, according to the Taiwan Semiconductor Industry Association.
Given that advanced chips underpin everything from artificial intelligence to advanced weaponry, the US’ reliance on Taiwan is a strategic vulnerability. It is also expensive.
Taiwan’s trade surplus with the US surged to a record US$64.8 billion last year, according to government data. And unless action is taken, it is likely to continue to grow as artificial intelligence drives a boom in demand for cutting-edge chips.
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