Taiwan’s technology protection laws are preventing Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, from manufacturing its most advanced 2-nanometer chips outside of Taiwan. This revelation, confirmed by Taiwan’s Minister of Economic Affairs, JW Kuo, comes amidst growing concerns about the future of TSMC’s global operations.
Reports earlier this week suggested that TSMC might be forced to accelerate the production of its 2-nanometer chips at its Arizona factories following Donald Trump’s re-election as U.S. president. However, Kuo clarified that Taiwan’s laws, designed to safeguard its technological advancements, currently prohibit the export of 2-nanometer chip manufacturing technology.
“Although TSMC plans to make 2-nanometer chips [abroad] in the future, its core technology will stay in Taiwan,” Kuo said. This restriction reflects Taiwan’s determination to maintain its technological dominance in the semiconductor industry.
Despite this regulatory hurdle, TSMC’s U.S. expansion plans remain on track, as the company confirmed earlier this week. The chipmaker, a key supplier to tech giants like Apple and Nvidia, is moving forward with its $65 billion investment in advanced semiconductor production facilities in Arizona. This expansion signifies TSMC’s commitment to the U.S. market, even in the face of growing trade tensions between the U.S. and China.
However, recent developments have added a layer of complexity to TSMC’s global operations. The U.S. has requested that TSMC halt shipments of chips used in AI applications to customers in China after discovering one of its chips in a Huawei AI processor. This move, coupled with Trump’s proposed 60% tariffs on Chinese goods, could significantly impact China’s economy and create further challenges for TSMC.
Despite these challenges, TSMC’s shares have continued to rise, although its October sales showed the slowest growth since February. The company’s continued success highlights the importance of its advanced chip technology and its ability to navigate the complexities of global trade. As TSMC continues its expansion and faces new challenges, the world will be watching closely to see how it manages its delicate balancing act between technological innovation and global politics.
