OPINION:
Taiwan is an important partner for the United States.
It is working to reindustrialize and onshore drone, robotics and advanced-manufacturing supply chains. It also supplies the U.S. with the advanced chips necessary for maintaining our frontier lead in artificial intelligence over China.
Taiwan is investing unprecedented amounts of money to help restore American chip fabrication capacity.
In July, Taiwan Semiconductor Manufacturing Co. committed to investing an additional $100 billion for the construction of several advanced fabs and advanced packaging facilities in Phoenix.
These facilities would allow the U.S. to produce chips with 2-nanometer process nodes and below, as well as packaging technologies necessary for AI computing. They bring TSMC’s total investment in the U.S. to $265 billion.
The Trump administration is focused on onshoring critical industries, and with good reason, but Mr. Trump’s contentious claim that Taiwan “stole” America’s chip industry and Treasury Secretary Scott Bessent’s statement that the concentration of advanced chip production in Taiwan represents the “single greatest point of failure for the world economy” position Taiwan as a competitor in semiconductor manufacturing, not a partner.
Although these statements are often taken out of context, they amplify fears among the Taiwanese that the U.S. seeks to “hollow out” Taiwan’s advanced semiconductor industry.
By feeding into the “hollowing out” narrative, the administration is arming Taiwan’s political opposition and other skeptics with rhetorical ammunition to resist deeper U.S.-Taiwan economic cooperation.
It is also providing cannon fodder for China to undermine Taiwan’s trust in the U.S. through ongoing cognitive warfare campaigns. China began spreading the story in Taiwan’s information ecosystem as early as 2021.
The narrative is part of a broader “America skepticism” refrain, which posits that the U.S. is an unreliable partner and will ultimately abandon Taiwan should China attempt to take it by force.
There is a perception that by onshoring advanced semiconductor production, America would undermine the so-called silicon shield, which proposes that Taiwan’s chip industry secure an American commitment to Taiwan’s defense and deter Chinese aggression.
Kuomintang party leader Cheng Li-wun remarked that the Trump administration’s aim to significantly increase domestic chip production by 2028 is tantamount to “completely relocating and hollowing out” Taiwan’s “family fortune and sacred mountain.”
This skepticism is making its way into policy. KMT legislators plan to advance a bill to grant Taiwan’s legislature unprecedented authority to restrict the outbound investments of Taiwanese semiconductor companies.
If passed, the measure could directly affect TSMC’s ability to build fabs in the U.S., Japan and Germany.
The “America skepticism” narrative polarizes the Taiwanese. Opposition supporters are more likely to believe that TSMC’s investments in the U.S. erode the silicon shield, according to a survey of Taiwan’s political opposition by Academia Sinica. Conversely, those who support the ruling Democratic Progressive Party are more inclined to view these investments as a sign of deepening U.S.-Taiwan economic interdependence.
Taiwan should recognize the strategic opportunity in deepening its economic ties with America. Rather than a “hollowing out,” TSMC’s investments represent an expansion of Taiwan’s footprint on the global economy.
They mark the next phase of a derisked, “non-China-centered” globalization in which deeper interdependence between Taiwan, America and allies strengthens supply chain resilience.
Because of the surge in demand for AI chips, the U.S. is also a major contributor to Taiwan’s economic growth. Therefore, Taiwan will be a key player in the global economy for decades to come, and its continued leadership in advanced semiconductors is aligned with American interests.
Taiwan did not “steal” the American chip industry. It supplies American firms. During the 1990s, the American semiconductor industry shifted toward the “fabless-foundry” business model, resulting in a division of labor where American firms specializing in chip design outsourced chip production to foundries in Taiwan and other East Asian countries.
The model allows chip designers to focus their capital on innovation and marketing.
Taiwan is the single greatest point of productivity — not failure — for the global economy. TSMC produces more than 90% of the world’s most advanced semiconductors. More than one-fifth of global maritime trade transits through the Taiwan Strait.
These are assets, not vulnerabilities.
Taiwan is not a competitor to the United States; it is an indispensable partner. Unfairly characterizing the island nation gives credence to narratives that erode a strategic relationship forged by shared interests and values.
The U.S. and Taiwan stand to gain if they recognize that the partnership is deepening, not diminishing. We should keep the money flowing and the fabs humming.
• Peter V. Tozzi is a policy analyst at the Research Institute for Democracy, Society and Emerging Technology, a Taipei-based think tank.
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