TAIPEI (Taiwan News) — Chung-Hua Institution for Economic Research President Lien Hsien-ming (連賢明) said Thursday that Taiwan need not be alarmed by US rhetoric on semiconductor reshoring, estimating that less than 15% of TSMC’s advanced process capacity would be manufactured in the US during US President Donald Trump’s term.

After concluding negotiations with Taiwan last week, Lutnick said, “The objective is to bring 40% of Taiwan's entire supply chain and production to domestically bring it into America,” per CNA.  

Lien said Lutnick has repeatedly inflated TSMC’s investment figures in interviews, "showing a strong desire to take advantage of Taiwan.” He added that this was not only the case for Taiwan, but also for South Korea and Japan.

Lien said the public should not be shocked by Lutnick’s remarks. Taiwan has committed only US$250 billion (NT$7.89 trillion) in private-sector investment in the US, supported by an equal amount in government credit guarantees, which cannot be combined.

The government’s purpose is to assist or accelerate private investment in the US, he said. This point is clearly stated in the Ministry of Economic Affairs’ press release.

Lien said that former US President Joe Biden’s CHIPS Act set a national security goal of producing 30% of advanced semiconductor manufacturing domestically. Lutnick’s push to raise the target to 40% or 50% is aimed at highlighting Trump’s superiority over Biden.

Plans for domestic advanced-process production involve not only TSMC, but also Samsung, Micron, and Intel. Trump recently met with Intel CEO Pat Gelsinger after Intel’s 2-nanometer process entered mass production, reportedly securing Apple orders.

Micron also recently held a groundbreaking ceremony for a capital-intensive new US fab. If these companies’ advanced processes progress smoothly, pressure on TSMC will be reduced, Lien said.

TSMC outlined US fab progress during last week’s earnings call. Construction of the second fab has been completed and equipment installation has begun, with production expected in the second half of 2027.

Construction of the third fab began this year. The odds of completing it during Trump’s term are low and the fourth fab has only just started the application process.

Lien said the most likely outcome is three completed fabs. Their projected capacities include a first fab producing 4-nanometer chips at 20,000 wafers per month, which has already been completed.

A second fab is expected to produce 3-nanometer chips at 30,000 wafers per month and is projected to reach that level in 2027. A third fab is planned to produce 2-nanometer chips at 30,000 wafers per month, with the earliest production timeline being 2028.

TSMC’s total 3-nanometer capacity is expected to reach 200,000 wafers per month this year, while total 2-nanometer capacity is projected at 140,000 wafers per month. Even with maximum effort, less than 15% of TSMC’s advanced process capacity is likely to be produced in the US during Trump’s term, said Lien.

Lien added that the Taiwan–US trade agreement goes beyond tariff exemptions for semiconductor fabs. Equipment and machinery used by Taiwanese companies to invest in and build US fabs would also be tariff-free, reducing uncertainty for Taiwan’s semiconductor industry while supporting production in the US.

“Looking at how nervous South Korea is, you can tell that this trade agreement will greatly benefit Taiwan's semiconductor industry,” he said.