The Taiwanese company has planned to invest a hefty sum
The ‘world’s most powerful company’ has announced it would pay the United States a $100 billion ‘protection fee’ amid fears of war.
Taiwan’s President, Lai Ching-te, and the CEO of Taiwan Semiconductor Manufacturing Company (TSMC) made a groundbreaking announcement earlier this month: TSMC is set to invest a staggering $100 billion in the United States.
This ambitious plan includes the construction of three additional chip manufacturing plants and two packaging facilities in Arizona. While President Lai emphasized that the decision was driven by customer demand rather than pressure from the Trump administration, the move has sent ripples of concern across Taiwan. There are growing fears that Taiwan is not only losing control over its semiconductor industry—its economic crown jewel—but also the “silicon shield” that has long protected the island from potential Chinese aggression.
The metaphor of Taiwan’s “silicon shield” underscores the island’s crucial role as a global powerhouse in high-tech goods, particularly through TSMC, which produces around 90% of the world’s advanced microchips. These chips power everything from smartphones to military weapons to artificial intelligence, acting as a cornerstone for Taiwan’s geopolitical stability.
Former President Ma Ying-jeou, a member of the opposition, has sharply criticized the ruling Democratic Progressive Party (DPP), accusing them of “selling TSMC” as a “protection fee.” Taking to Facebook, Ma labeled the decision a “major national security crisis.”
The Kuomintang (KMT), Taiwan’s opposition party, has ramped up its criticism. One KMT representative warned that this move could severely damage public confidence, harm cross-strait relations, and destabilize Taiwan’s geopolitical standing. KMT lawmaker and chief whip Fu Kun-chi further questioned the long-term security implications, asking, “If TSMC becomes the ‘American Semiconductor Manufacturing Company’, where does that leave Taiwan’s security?”
Last week, President Lai Ching-te reaffirmed that Taiwan Semiconductor Manufacturing Company’s (TSMC) $100 billion investment in the U.S. would not come at the expense of its expansion plans on the island. However, the growing threat from China remains a major concern. The Chinese Communist Party continues to assert its claim over Taiwan, with threats to take full control by force if necessary.
Taiwan’s security relies heavily on military and political support from the United States, as outlined in the Taiwan Relations Act. Yet, former President Donald Trump has undermined this legal responsibility by accusing Taiwan of “stealing” the U.S. semiconductor industry and demanding that the self-governing island pay for its protection. Taiwan sees troubling parallels between its situation and Ukraine’s struggle against Russian aggression, fearing a similar outcome.
Trump’s harsh approach with Ukraine, which included a confrontation where he reportedly “yelled” at President Zelenskyy, has only fueled these fears. While Washington pushes for a 30-day ceasefire between Kyiv and Moscow, it has also pressured Ukraine into granting the U.S. access to its mineral resources.
Tammy Chao, a retiree, shared her concerns with CNN, fearing that Taiwan could become a pawn in Trump’s “game” in the future. “Taiwan, just like what he said to Zelenskyy, ‘you have no cards to play,’ and Taiwan is not gonna have cards to play,” Chao said. “TSMC was the best card.”
