Taiwan President Defends TSMC’s $100 Billion U.S. Chip Investment

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Taiwan President Defends TSMC’s $100 Billion U.S. Chip Investment

President Lai Ching-te of Taiwan on Thursday sought to reassure his citizens that a plan by a Taiwanese chip giant to spend $100 billion in the United States would benefit the island, after the company’s pledge this week raised concerns at home.

Taiwan Semiconductor Manufacturing Company, the world’s largest chip manufacturer, announced on Monday that over the next four years it would expand its operations in Arizona to make chips for artificial intelligence and other high-tech applications. President Trump has pressed Taiwan to loosen its dominance in advanced semiconductors and to move production to the United States, and he has warned of hefty tariffs if his demands are not met.

But TSMC’s announcement also stirred debate and misgivings in Taiwan, a democratically governed island where many people see the chip sector as a vital economic pillar and a shield against possible aggression by China, which claims it is part of its territory. The commitment from TSMC would lift its planned spending in the United States to $165 billion, more than double its previous commitments there.

Mr. Lai, in a news conference in Taipei on Thursday with C.C. Wei, the chief executive of TSMC, asserted that the plan was good for TSMC, Taiwan and the United States.

“We have seen every time that with each initiative by TSMC, TSMC has grown even stronger and more competitive, while also providing Taiwan’s businesses with opportunities for international cooperation and contributing to Taiwan’s greater strength,” Mr. Lai told reporters at the presidential office. He said that Taiwan could now “confidently cross the Pacific Ocean and expand eastward to the American continent.”

Mr. Wei asserted that TSMC’s decision was based on business considerations — implying that the company was not bending to political pressure. “We have done a lot of analysis, and I’ve communicated with all our customers,” he said. “It turns out that TSMC’s current expansion plan in the United States is not enough to meet their demand.”

The company’s production in Taiwan would not be hurt by its growing investment in the United States, Mr. Wei said.

Not everyone in Taiwan is convinced. “When TSMC invests so much capital and takes its most advanced manufacturing processes to the United States, what has Taiwan gained in return?”

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, a legislator from Taiwan’s opposition Nationalist Party, said at a news conference this week.

TSMC executives have previously insisted that the company would keep its most advanced factories in Taiwan. The company has invested billions growing deep roots and a network of highly specialized suppliers in Taiwan. While it has opened new factories in Japan and Arizona, its most cutting-edge chips are still made in Taiwan.

Mr. Lai’s government has been trying to respond to complaints from Mr. Trump that Taiwan spends too little on its own defense, has a disproportionate trade surplus with the United States, and has stolen the semiconductor business from American companies.

Any rupture with Mr. Trump would be a crisis for Taiwan, which has for decades turned to the United States as its chief political and military supporter against potential threats from China. Beijing claims the island as its territory and says it could use force to take it if its leaders see no hope for peaceful unification.

Last month,

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Taiwan’s military spending to over 3 percent of its economic output, from about 2.45 percent this year. Mr. Trump and officials around him have said that Taiwan should be devoting 5 percent, or even 10 percent, of its economy to its military.

Mr. Trump announced TSMC’s new commitments with Mr. Wei by his side at the White House on Monday. The investment would help TSMC avoid tariffs on chips made in Taiwan, Mr. Trump said.

The investment will expand TSMC’s footprint in Arizona from three manufacturing plants to six, add 25,000 jobs and create a research and development center to develop production processes. Apple is the facility’s largest customer. TSMC also makes chips for Nvidia, AMD, Qualcomm and Broadcom.

Despite its global importance, TSMC has shied away from media attention, and its executives rarely take questions from journalists. Mr. Wei, the chief executive, suggested that he did not relish the attention.

“Life has been a bit stressful lately,” he said, “meeting two presidents in such a short time, and to also have to meet with friends from the media, and then answer questions.”

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