The Taiwan Semiconductor Manufacturing Company (TSMC), often hailed as a leader in chip manufacturing, has stirred global debate with its recent announcement of a $100 billion investment in the U.S. to build new chip factories and research centers. This bold move comes amid escalating pressure from the U.S., where former President Donald Trump urged for the investment to double to $200 billion – a figure nearly equal to TSMC's total assets.
This mounting pressure exposes vulnerabilities within Taiwan's economic model, which has become heavily reliant on its semiconductor sector. Observers note that the industry now consumes over 30 percent of the island's electricity, with TSMC expected to draw nearly 10 percent of Taiwan's power generation in 2024.
At the same time, Taiwan's broader economy shows signs of imbalance. While TSMC powers innovation, other industries such as manufacturing and agriculture have faltered; in 2023, manufacturing output declined by 12.7 percent. Additionally, substantial investments in Arizona – now exceeding $65 billion – risk diverting critical resources from Taiwan's domestic ecosystem.
This scenario reflects a broader global pattern where geopolitical tensions influence economic priorities. As Washington leverages economic ties under an "America First" agenda to secure supply chains, Taiwan's role as a bridge for cross-Strait technological collaboration is increasingly jeopardized.
Similar pressures are visible among U.S. allies in Asia, from South Korea to Japan, as they balance economic growth with geopolitical expectations. With China repeatedly cautioning against weaponizing economic interdependence, the current challenges in Taiwan serve as a stark reminder that when geopolitics overtakes economic prudence, the livelihoods of ordinary people are the ones that pay the price.
TSMC's strategic decisions, at the crossroads of technology, energy consumption, and international relations, invite a fresh look at how economies must navigate the delicate balance between global ambition and local resilience.
Reference(s):
Taiwan's semiconductor dependency a geopolitical cautionary tale
cgtn.com
