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TSMC's US Advanced Chip Output Under 15% by 2029, Expert Estimates

An economic expert estimates that less than 15% of TSMC's advanced semiconductor manufacturing will be located in the United States by the end of 2029. This assessment comes despite TSMC's massive $65 billion investment in three Arizona fabrication plants, with more facilities planned. The analysis follows comments from a U.S. Commerce Secretary about relocating Taiwan's supply chain, which the expert suggests is an overstated pressure tactic. A new US-Taiwan trade deal involves a $250 billion Taiwanese investment, paired with government credit guarantees.

Key Points: TSMC US Advanced Chip Production Below 15% by 2029

  • TSMC's US advanced output limited
  • $65B Arizona fab investment underway
  • US-Taiwan tariff deal and $250B investment
  • Expert sees US pressure tactics
  • Intel, Samsung success could ease TSMC pressure
2 min read

Less than 15 per cent of TSMC advanced processes in US by 2029: Expert

Expert analysis reveals less than 15% of TSMC's advanced semiconductor processes will be in the US by 2029, despite major Arizona investments.

"less than 15 per cent of the company's high-end processes would be located in the U.S. - Lien Hsien-ming"

Taipei, January 23

Experts believe that less than 15 per cent of Taiwan Semiconductor Manufacturing Company's advanced manufacturing processes will be relocated to the United States by the end of 2029, according to a report by Focus Taiwan.

Lien Hsien-ming, president of the Chung-Hua Institution for Economic Research, shared this assessment following comments from U.S. Commerce Secretary Howard Lutnick. He recently stated on CNBC that Washington intends to move 40 per cent of Taiwan's supply chain to American soil before the conclusion of U.S. President Donald Trump's second term.

Focus Taiwan notes that TSMC is currently investing USD 65 billion into three facilities in Arizona, with the first fab beginning commercial production in late 2024. The chipmaker has also committed another USD 100 billion for three additional fabs, two assembly plants, and a research centre.

Citing TSMC, Lien said equipment installation has begun at the second Arizona fab, which is scheduled to start mass production in 2027, while construction of the third fab started earlier this year. TSMC is also applying for a permit to build a fourth fab.

After factoring in TSMC's Arizona schedule and its overall output of advanced chips, Lien estimated that less than 15 per cent of the company's high-end processes would be located in the U.S. by the end of Trump's presidency.

The economist suggested that pressure on TSMC might diminish if other major players like Intel, Micron, and Samsung successfully advance their own U.S. projects.

Focus Taiwan also highlighted a recent agreement between the U.S. and Taiwan to reduce tariffs on Taiwanese goods from 20 per cent to 15 per cent. This deal involves a USD 250 billion investment from Taiwanese tech and energy sectors into the U.S., supplemented by USD 250 billion in credit guarantees from the Taiwanese government to support these industries.

Lien cautioned the public against being discouraged by Secretary Lutnick's rhetoric, clarifying that the actual direct investment commitment is USD 250 billion, rather than the USD 500 billion "down payment" figure Lutnick mentioned during his interview.

According to the Focus Taiwan report, Lien believes the U.S. Commerce Secretary is overstating these commitments as a tactical move to exert pressure on Taiwan, a strategy that has similarly been applied to Japan and South Korea.

- ANI

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Reader Comments

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Priya S
As someone in tech, this is worrying for global stability. TSMC in Taiwan is the world's chip factory. Spreading it out is good for risk management, but the pressure tactics mentioned are concerning. We need cooperation, not coercion. 🤔 Hope India's semiconductor plans are watching and learning from this.
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Aman W
The expert Lien is right to clarify the numbers. US officials often talk big to create pressure. $250 billion is still a massive investment from Taiwan. This shows how critical chips have become - they are the new oil. India should fast-track its own fabs and not rely too much on any one region.
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Sarah B
Interesting read. The tariff reduction from 20% to 15% is a significant part of the deal that shouldn't be overlooked. It's a classic carrot-and-stick approach by the US. While the focus is on TSMC, the broader tech and energy investment is what will have longer-term ties.
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Karthik V
Respectfully, I think the article downplays the sheer scale of investment. $65 billion + $100 billion in Arizona alone is staggering. Even 15% of TSMC's advanced processes in the US would be a game-changer for American tech. Taiwan is walking a tightrope between two superpowers.
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Nikhil C
The key takeaway for India is diversification. We need multiple suppliers and our own capacity. The US applying similar pressure to Japan and South Korea shows this is a pattern. Atmanirbhar Bharat in semiconductors is not just an ideal, it's a strategic necessity. Jai Hind! 🇮🇳

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