Semiconductor manufacturing has further shifted to Asia in recent years from US and EU, with many US chip companies contracting out to Asian producers like TSMC
Presumably Taiwan intervenes to keep the TWD weak for a reason (Korea has been less active in recent years, but it also has a history of hefty intervention) https://www.wsj.com/... https://twitter.com/... @intelpolicy : Important data here supporting Why Fewer Chips Say ‘Made in the U.S.A.’ American chip production is a critical component of our national security, and industry & government must work together to increase domestic manufacturing. Read more in @WSJ: https://www.wsj.com/... @wsj : Chips are increasingly being viewed across the globe as a national-security priority because of the powerful role they play not only in consumer technology but in militaries and cyberwarfare https://www.wsj.com/...
Context & Ripple Effects
This November 2020 report is the opening frame of the reshoring arc the later coverage fills in: years of US chip firms contracting fabrication out to TSMC and other Asian producers had left American capacity thin, and within months the White House was in talks with Intel and TSMC about building fabs on US soil. By 2023 the SIA tallied 40+ proposed projects worth roughly $200B since 2020 — the policy response to exactly the dependence this article documents.
The piece also names the quieter lever behind the shift: Taiwan's presumed intervention to keep the TWD weak, which stacks an exchange-rate cost advantage on top of foundry scale. That puts the fab-location question and currency policy in the same national-security frame, a pairing Korea knows well given its own intervention history.
First-order effects
- US fabless chip firms that contract to TSMC face immediate pressure from Washington to diversify production geography, since their supply chains sit entirely inside the region the government now treats as a security exposure.
- Taiwan's currency practice becomes part of the policy conversation: the same weak-TWD advantage that makes TSMC the low-cost contractor is now legible as state support, not just efficiency.
Second-order effects
- Korean players get pulled into the same scrutiny — Samsung and SK Hynix later rethink their China exposure once the Chips Act attaches expansion guardrails to US support, showing how the 2020 security framing hardens into binding rules.
- Equipment suppliers see demand distort early: Chinese orders for chipmaking gear jumped 58% YoY in 2021 as buyers reportedly paid above-market prices ahead of tightening controls, evidence that the securitization of chips reprices the whole tool chain.
Third-order effects
- If the pattern holds, global capacity bifurcates into US-allied and China-serving segments, which erodes the geographic concentration behind Taiwan's so-called silicon shield — the deterrence-by-dependency logic that Taiwan's centrality currently provides.
- Exchange-rate management becomes an explicit instrument of industrial policy in semiconductors, raising the odds that currency practices are contested as trade issues rather than monetary ones.
The trend: Semiconductors are being reclassified from a traded commodity into strategic infrastructure, with governments reaching for fabs, export controls, and even exchange rates as tools of national power.