In order to avert US punitive tariffs and secure military support, Taiwan is massively shifting its most important industry to the USA. It is the largest technological "move" in history—and a risky game against Beijing.
âťť"They have to keep our president happy because he is the key to their protection."
US Commerce Secretary Howard Lutnick
Details
🇺🇸 The 250 billion bet: Taiwanese tech companies are investing at least $250 billion in US production. In return, Washington is lowering tariffs from 20% to 15%, giving Taiwan the same status as Japan or South Korea.
🏗️ TSMC expands in Arizona: The world market leader has already purchased hundreds of hectares of land in Arizona.
- US Commerce Secretary Lutnick issued a clear threat: anyone not producing in the USA will pay a 100% tariff in the future. The goal is US self-sufficiency by 2029.
đź’° Record profits despite pressure: TSMC reported a 35% jump in profits and plans expenditures of up to $56 billion for 2026. The massive AI demand from Nvidia and Apple is financing the expensive expansion on American soil.
🇨🇳 Beijing is outraged: China’s embassy in Washington sharply condemns the deal and calls on the USA to revoke the agreement. Beijing sees it as a violation of the One-China policy and warns of "consequences."
Good to know: Silicon shield 🛡️
Taiwan produces over 90% of the world's most advanced chips—only about 150 km from mainland China. This dominance is considered a "Silicon Shield": Taiwan's hope that the USA will defend them out of economic self-interest.
Now, the island is exporting its wealth and thereby weakening its own "Silicon Shield" in the long run.
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