FPI / January 17, 2025
A September 2023 Congressional Research Service report said as much as 90% of leading-edge semiconductor chip production is concentrated in Taiwan.
President-elect Donald Trump not only wants to change that, but wants the United States to become the world leader in advanced microchip production, an industry now dominated by Taiwan.

However, communist China is a major factor in what is also a geopolitical equation.
As it comes into power on Jan. 20, the Trump administration will have to consider whether to proceed with the Biden administration’s plan to pay $6.6 billion to the Taiwan Semiconductor Manufacturing Co. (TSMC) to build an advanced semiconductor fabrication plant in Arizona.
Trump has said that Taiwan’s dominance in global microchip production is alarming because of Taipei’s market reliance on China, according to a Washington Times report.
The Commerce Department ordered TSMC to halt shipments of advanced chips, often used in artificial intelligence applications, to Chinese companies, Reuters reported in November.
TSMC appears to have cooperated with U.S. officials. Reuters reported that Commerce issued its order after TSMC notified the department that one of its chips was found in an AI processor maintained by Huawei, the China-owned telecommunications giant on the U.S. restricted trade list.
Elbridge Colby, Trump’s nominee for the powerful post of undersecretary of defense for policy, has said he favors the destruction of TSMC’s fabrication plants if China follows through with threats to annex the self-ruled island.
Massachusetts Democrat Rep. Seth Moulton said in an online post that TSMC facilities should be blown up if China invades. In response, Colby said Moulton was “absolutely correct about this.”
TSMC is among 50 Taiwanese companies that play essential roles in other parts of the global semiconductor supply chain, including chip design, research and development, assembly, packaging, and testing of semiconductor materials such as silicon wafers.
The Taiwanese government has supported the semiconductor industry’s development since the mid-1970s. It provided about half of TSMC’s initial $200 million startup funding.
In 2021, TSMC announced plans to invest $100 billion over three years to expand advanced semiconductor production in Taiwan, including $12 billion for the fabrication facility in Arizona.
Plans also include spending $3 billion for a foundry in China and a new materials facility in Japan.
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