An interview with TSMC Chair Mark Liu on why the company plans to stay in Taiwan, the US CHIPS Act, China invading Taiwan, cutting off Huawei in 2020, and more
New York Times : Twitter: @craigaddison Twitter: Craig Addison / @craigaddison : Most stories on #Taiwan & #TSMC nowadays mention silicon shield. “Mr. Liu rejected the idea of the “silicon shield”: that Taiwan's chip-making prowess deters military action by China and brings support from the United States. Both need Taiwan's chips.” https://www.nytimes.com/...
Context & Ripple Effects
TSMC’s position has been shaped by an earlier need to comply with US technology policy while retaining Chinese customers, including the 2020 halt in shipments to Huawei. The interview puts that long-running balancing act alongside Taiwan’s role as the company’s operating center.
Related coverage shows Liu had already questioned whether semiconductor localization would improve supply-chain resilience, while more recent coverage found geopolitics dominating TSMC’s annual meeting and its US expansion debate. This makes his rejection of the “silicon shield” notable: he separates the company’s industrial importance from any assurance of political protection.
First-order effects
- TSMC publicly reinforces Taiwan as its base, giving customers and governments a clearer signal that overseas expansion is not presented as a replacement for its home footprint.
- Liu’s comments keep the US CHIPS Act, China risk and the Huawei cutoff in one strategic frame: TSMC must manage policy constraints across markets while preserving its core manufacturing position.
Second-order effects
- Major chip buyers will continue to weigh TSMC’s Taiwan concentration against the availability and timing of capacity elsewhere, rather than treating localization policy as an immediate diversification solution.
- US industrial-policy efforts face a practical tension highlighted in Liu’s earlier criticism of localization as a resilience fix: incentives can add capacity, but may not quickly displace an established manufacturing center.
Third-order effects
- If this pattern holds, semiconductor resilience will increasingly mean adding geographically distinct capacity around Taiwan—not assuming that production can be cleanly or rapidly relocated from it.
- The industry’s dependence on Taiwan is becoming a durable commercial and policy variable, with corporate supply-chain planning increasingly intertwined with cross-strait risk even as deterrence claims remain contested.
The trend: Semiconductor supply chains are moving toward selective geographic redundancy while Taiwan remains central to leading-edge manufacturing.