TSMC able to cope with Trump in White House: Expert

Taipei, Nov. 7 (CNA) Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) should be able to minimize the potential impacts of U.S. President-elect Donald Trump's second term, an industry expert said Wednesday.

There have been concerns about the possible impact on Taiwan's semiconductor industry if Trump follows through on comments made in October about imposing tariffs on foreign chipmakers, and Ray Yang (楊瑞臨) from the Industrial Technology Research Institute told CNA that trade duties are an issue linked with TSMC.

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In an interview with podcaster Joe Rogan released on Oct. 26, Trump described the U.S. CHIPS and Science Act -- under which TSMC has received significant subsidies -- as "so bad."

"[The United States] put up billions of dollars for rich companies to come and give us the good companies anyway [when] all you had to do was charge them tariffs," Trump said.

Yang noted that while North America is TSMC's biggest market, accounting for over 70 percent of the company's sales for the first time during the third quarter, the chipmaker's efforts to diversify its productions could help it better respond to the change of government in the U.S.

TSMC's Japanese subsidiary is expected to begin mass production in December, while the first fab built in the U.S. state of Arizona is set to enter mass production during the first quarter of 2025, said Yang, who works at the government-sponsored institute as an international strategy development consulting director.

Potential U.S. government sanctions on Chinese technologies and semiconductors, and U.S.-Japan relations will be two key issues to watch next, Yang added.

The fabs in Japan and the U.S. allow TSMC to be more flexible in planning production, Yang said, because the fab in Japan can produce chips for American customers if the alliance between Tokyo and Washington stays stable.

If there are changes to the alliance, TSMC could ramp up production in Arizona, he added.

Moreover, chips produced by TSMC for its customers in the U.S., including Apple Inc., Nvidia Corp. and Advanced Micro Devices, Inc., are not shipped to the U.S. but to where those tech companies' products are assembled, Yang said.

If Trump decides not to give subsidies promised by Biden under the CHIPS Act, TSMC can still discuss with its customers about sharing the costs that arise from the loss of U.S. government funding, Yang added.

In April, TSMC announced that its Arizona unit signed a nonbinding preliminary memorandum of terms with the U.S. Department of Commerce for up to US$6.6 billion in direct funding under the CHIPS Act.

TSMC has multiple options available to help reduce the impact on the company if the U.S.-China tech war escalates, Yang said, adding that Taiwanese businesses should be prepared to pick a side in such a scenario.

Also on Wednesday, Gordon Sun (孫明德), director of the Economic Forecasting Center at the Taiwan Institute of Economic Research, told reporters that Trump's return to the White House could increase tensions between the U.S. and China.

Taiwan has been noticed by Trump for its strength in semiconductors, and the U.S. president-elect could choose to hike customs duty or demand chipmakers to build more factories in America, Sun said.

If chipmakers with advanced technology are not affected by the high tariffs, Trump could pressure TSMC to invest in establishing production using the company's most advanced 2 nanometer process technology in the U.S., Sun added.

According to TSMC's announcement made in April, the company plans to begin production with the 2-nm technology at its second fab in Arizona in 2028.