In recent years, the semiconductor landscape has seen swift transformations influenced by shortages and government interventions. With the rising Trump tariffs, the semiconductor powerhouse TSMC from Taiwan is gearing up to adapt by expanding its production facilities globally.

The recent implementation of tariffs combined with government incentives has propelled TSMC to increase its offshore investments. New fabrication facilities have emerged in both the United States and the EU, with TSMC committing over $100 billion to its U.S. operations alone.

These developments have raised concerns among Taiwanese officials, particularly with the enforcement of Article 22 of the Industrial Creation Ordinance aimed at preserving high-tech semiconductor production within Taiwan. This ordinance introduces an “N-1” policy, ensuring that other countries can only manufacture chips that are one node behind Taiwan’s capabilities. For instance, if Taiwan advances to 1 nm chips, other nations can only produce up to 2 nm chips, maintaining Taiwan’s lead.

While this law is indicative of Taiwan’s apprehension amidst ongoing global changes in the tech industry, TSMC’s overseas plants are primarily set up to produce chips that are already a few steps back, ensuring a cushion amid the evolving landscape of chip production.