Donald Trump tried to move the most advanced chip manufacturing to US soil by forcing TSMC to invest billions for 6 fabs + 2 Advanced Packaging Plant + 1 R&D Center in Arizona. This way USA can safely own the chip-making technology even if China takes over Taiwan. However, USA workers are not like Taiwanese engineers who can work diligently and the cost of manufacturing chips in US soil is at least double compared to manufacturing at Taiwan. Plus, if one day China does take over Taiwan and Trump is afraid to send soldiers there, then Taiwan would be like Hong Kong and quickly merged into the China system. If that does happen, China could utilize Taiwan's engineer brains and Chinese Technology to enhance the advanced chip manufacturing capability of TSMC (which may become part of SMIC). Therefore, Trump's plan of "manufacturing chip on US soil" may fail.
The above analysis touches on several critical factors regarding the geopolitics of semiconductor manufacturing, the labor force, and the strategic implications of moving TSMC’s manufacturing to the U.S. Here are detailed thoughts on each key point:
Trump’s push to relocate advanced chip manufacturing to the U.S. was primarily driven by:
Reducing dependence on Taiwan: Given the geopolitical risks of a potential Chinese invasion, the U.S. sought to ensure a domestic supply of cutting-edge semiconductors.
National security concerns: Advanced semiconductors are crucial for military and AI applications, and securing the supply chain is a high priority for the U.S. defense sector.
Maintaining technological leadership: Bringing TSMC to the U.S. was meant to prevent China from gaining control over the world’s most advanced chip-making capabilities.
While moving semiconductor production to the U.S. is a strategic move, there are significant obstacles:
Higher costs: Producing chips in the U.S. is estimated to be at least 50–100% more expensive than in Taiwan, due to labor costs, environmental regulations, and supply chain inefficiencies.
Workforce differences: Taiwanese engineers are known for their dedication and willingness to work long hours, while U.S. workers typically demand better work-life balance and higher wages. This cultural difference has already caused delays in TSMC’s Arizona fab, as TSMC has struggled to find and train skilled U.S. workers.
Supply chain gaps: Taiwan has a well-established semiconductor supply chain with specialized suppliers for chemicals, wafers, and equipment. The U.S. lacks this ecosystem, making operations less efficient.
If China were to successfully take control of Taiwan without U.S. military intervention, there are a few possible scenarios:
China absorbs TSMC’s talent and technology: While TSMC’s fabs in Taiwan could be sabotaged in a wartime scenario, the expertise of Taiwanese engineers and the intellectual property could be integrated into China’s semiconductor industry, potentially accelerating SMIC’s technological progress.
U.S. semiconductor independence weakens: If TSMC’s Arizona fab fails to be self-sustaining due to workforce or cost issues, and Taiwan falls under Chinese control, the U.S. may find itself struggling to maintain semiconductor self-sufficiency.
Global chip market reshuffles: If China takes control of TSMC and integrates it into its supply chain, the global semiconductor market could see a major power shift, with China potentially supplying more advanced chips to the world.
For the U.S. to ensure its semiconductor independence, it must:
Invest in workforce development: Training a new generation of skilled semiconductor engineers and technicians will be crucial.
Expand supply chain infrastructure: The U.S. needs a full semiconductor ecosystem, including suppliers for advanced materials and equipment.
Offer continued government support: The CHIPS Act provides incentives, but more long-term investments and subsidies are needed to make onshore manufacturing competitive.
Improve efficiency in Arizona: TSMC’s U.S. fabs must overcome current operational inefficiencies to become a viable alternative to Taiwan.
Trump’s plan has a solid strategic foundation, but its success depends on execution. If the U.S. can overcome its cost and workforce challenges, it may secure long-term semiconductor independence. However, if China does take Taiwan and successfully absorbs its semiconductor talent, the U.S. will face a much tougher competition in the chip industry. The outcome will depend on how well the U.S. government, industry, and workforce adapt to these challenges.