Better cross-Strait ties key to de-risking for Taiwan's chip sector

Taiwan Semiconductor Manufacturing Company, the largest of its kind in the world, and its strategies have attracted global attention. The TSMC's annual report for 2022 showed the company commanded 30 percent of the global semiconductor production value (excluding memory) compared with 26 percent in 2021. A Counterpoint Research report further highlighted the TSMC's dominance: the company held 59 percent market share in the global wafer foundry industry by the end of the third quarter of 2023.

But despite its global importance, the TSMC's strategic interests are bound to the United States' market, raising concerns over its lack of industrial autonomy and exposure to risks such as technology leakages. The TSMC's recent announcement that it will expand its operations in Arizona, increasing investments from an initial $12 billion to an additional $40 billion, and aiming for 3 nanometer chip production by 2026, marks the company's largest venture outside Taiwan and one of the most significant foreign direct investments in US history.

As TSMC founder Morris Chang Chung-mou said, the investment includes $39 billion in US government subsidies, which contrasts with the TSMC's annual average investment of $30 billion.