TSMC, the world’s leading contract chipmaker, has inadvertently become a geopolitical flash point again in relations between China, the U.S., and the island of Taiwan.
At a regular news conference in Beijing on Wednesday, Zhu Fenglian, spokesperson for China’s Taiwan Affairs Office, accused the island’s current government, the Democratic Progressive Party, of leveraging its world-leading chip industry “to seek independence,” and even giving its companies away as “souvenirs,” according to Reuters and Chinese media reports.
Zhu also alleged that people in Taiwan were worried Taiwan Semiconductor Manufacturing Co. (TSMC) risked becoming the “United States Semiconductor Manufacturing Co.” She did not provide examples.
TSMC declined to comment.
Taiwan is home to some of the world’s leading chip companies, and is often the only source of the most advanced chips that power leading-edge consumer devices and data centers. TSMC is a key partner to leading U.S. Tech companies like Apple and Nvidia.
Beijing claims the island of Taiwan, a self-governing democracy, as part of the People’s Republic of China. Taiwan’s government maintains independent relations with the rest of the world, including the U.S., but has not formally declared itself as an independent country separate from the People’s Republic of China.
Taiwan’s importance in the chip supply chain has led to concerns that tensions, if not outright conflict, between Beijing and Taipei could pose a major threat to the world economy. In addition, several countries, including the U.S., are investing in local chip manufacturing to diversify their semiconductor sources.
U.S. President Donald Trump has often accused Taiwan of stealing the U.S.’s chip industry, and has recently threatened tariffs on Taiwan-made chips. The president has also criticized his predecessor’s CHIPS Act, which seeks to develop the domestic chip manufacturing sector. Non-U.S. Chipmakers like TSMC and Samsung have won subsidies for chipmaking plants in the U.S.
Trump is also reportedly pressing TSMC to take over Intel’s plants. Intel, long an American chipmaking champion, has struggled in recent years as it tries to keep up with competition in both chip design and manufacturing. Neither TSMC nor Intel have confirmed the reports.
On Thursday, Taiwan Economy Minister Kuo Jyh-huei told reporters that TSMC needs “government permission” before engaging in any overseas joint ventures.
TSMC is expanding a plant in the state of Arizona that will likely start mass production of advanced chips in the first half of this year.
The U.S. Also sells weapons to Taiwan, including advanced air defense systems, but is ambiguous on whether it would defend the island in the event of an armed conflict. Beijing criticizes U.S. Arms sales to Taiwan as foreign interference.
On Wednesday, Zhu, from China’s Taiwan office, said that U.S. Arms sales only benefit U.S. Arms dealers and put Taiwan’s peace at risk.
