TAIPEI (Taiwan News) — A Taiwanese economist believes TSMC could handle the impact if the US cuts subsidies for its operations in America.

Taiwan Industry Economics Services Industrial Economic Database Director Liu Pei-chen (劉佩真) told CNA on Thursday that impacts of subsidy cuts would be within a controllable range for TSMC. She said the company could pass funding shortfalls on to customers due to its technological advantage.

Liu noted that TSMC committed to investing NT$2.14 trillion (US$65 billion) in its US operations before announcing a further NT$3.29 trillion on Monday. She said the US committed to providing about NT$217 billion in subsidies, which amounts to about 10% of the initial investment.

Liu said the impacts would be greater for other semiconductor manufacturers like Intel, Samsung, and Taiwan's GlobalWafers.

Digitimes Senior Analyst Chen Chih-chia (陳澤嘉) said on Wednesday that Intel’s recent US expansion required substantial investment and the company relies on US government subsidies. Chen noted Intel recently extended the schedule of a factory construction project in Ohio based on the possible termination of subsidies.

Liu said America’s credibility as an investment destination will be damaged if US President Donald Trump cuts the subsidies promised during the Biden administration. Despite that, she said Trump’s tariffs may achieve his goal of bringing more semiconductor manufacturing to the US, though further observation is needed.  

Trump said on Tuesday that the US should remove the CHIPS Act and use funds allocated to it to reduce debt. The act passed in 2022 and allocated grants for more than 20 companies to encourage semiconductor production in the US, with TSMC being one of the largest recipients.