Taiwan Will Not Allow TSMC To Build 2nm Fabs Outside Taiwan

If you weren’t aware, Taiwan will not allow TSMC to build 2nm chips outside of Taiwan at this point in time. When you stop and think about it for a second, it makes sense. It’s tech nationalism… which is exactly what the United States is trying to achieve with the Biden Administration’s CHIPS Act. It’s a way to keep the United States interested in defending the island of Taiwan.

Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday.

Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday.

“Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s Economics Committee in Taipei.

https://www.taipeitimes.com/News/biz/archives/2024/11/08/2003826545

Okay, so TSMC has 2nm chips on the roadmap for its Arizona fabs but it’s years away. And in the meantime TSMC is building a fab for 2nm chips on the island of Taiwan. So Taiwan gets 2nm chips before the United States does. That’s what’s happening.

semiconductors

Now the Trump Administration may very well throw a wrench into the works and blow everything up in a temper tantrum over not getting 2nm chips. Trump is only lukewarm on the CHIPS Act as are Republican congressmen apparently. So Trump & Gang may very well use TSMC’s future CHIPS Act awards as leverage against it, attempting to force it to make 2nm chips inside the United States.

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Taiwan’s government may bend under the Trump Administrations threats and reversal of TSMC’s funding. Taiwan still needs the United States to provide it with an adequate defense against the Chinese Communist Party on the mainland. That’s the sad truth. And Trump has shown little interest in defending allies.

Ultimately the United States will have a 2nm fab one way or another. It is absolutely vital to national security and this gap in our technological power cannot be overlooked. In a future conflict with China the world will lose at least 40% of its fab capacity from Taiwan alone. The flow of electronics from China stopping would be devastating to the world economy all on its own. We are dependent on Asia for everything. That cannot continue.