Taiwan Min: TSMC to Keep Up to 80% Chip Production Home by 2035

Taiwan’s Minister of Economic Affairs, Kung Ming-hsin, delivered a decisive counter-narrative to Washington’s reshoring rhetoric on Wednesday, clarifying that Taiwan Semiconductor Manufacturing Co. (TSMC) will retain 70% to 80% of its global chip manufacturing capacity on the island through 2035. This statement directly responds to US President Donald Trump’s recent campaign assertions in Arizona claiming that the United States would soon secure 50% of global semiconductor production. The divergence between Washington’s political ambitions and Taipei’s industrial reality underscores the intricate geoeconomic friction surrounding the global semiconductor supply chain and Taiwan's unyielding strategy to preserve its "Silicon Shield."

File photo: Taiwan Minister of Economic Affairs Kung Ming-hsin. (Photo: Song Bi-long / Epoch Times)

While aggressive US subsidies and trade pressures have driven TSMC to expand advanced fabrication facilities in Arizona, Japan, and Europe, the fundamental economics of semiconductor manufacturing heavily favor Taiwan’s domestic ecosystem. High-density supply chains, unrivaled engineering talent pools, and deep integration between R&D centers and advanced packaging facilities ensure that cutting-edge nodes (2nm and below) remain anchored in Taiwan. 

Foreign expansions serve primarily as geographic risk mitigation for Western clients rather than a structural transfer of core manufacturing dominance, leaving Washington’s 50% capacity targets mathematically unfeasible within the next decade.

Securing TSMC’s domestic manufacturing moat requires vast, uninterrupted energy inputs—a critical vulnerability for Taiwan's island grid. To hedge against potential blockade risks and power shortages, Taiwan's state-owned energy firm, CPC Corporation, is finalizing negotiations for a major LNG deal in Alaska. The agreement involves a $4.4 billion capital commitment to co-develop Alaskan gas infrastructure alongside a long-term contract to purchase 6 million tons of LNG annually starting as early as 2032. This multi-billion-dollar energy pivot functions as a strategic trade offset, aligning Taiwanese capital with American infrastructure while securing crucial energy feedstocks necessary to sustain energy-intensive semiconductor fabs.

Ultimately, the interplay between chip manufacturing retention and trans-Pacific energy investments reveals a calculated geopolitical bargain. Taiwan continues to offer targeted capital investments in US strategic sectors—such as Alaskan natural gas and selective fab expansions—to appease political demands in Washington. However, by maintaining up to 80% of TSMC's manufacturing capacity within its sovereign borders, Taipei ensures that the world's reliance on its microchip monopoly remains intact, preserving its primary deterrent against regional coercion.