TSMC chairman Mark Liu on US-China tensions, the push for semiconductor localization in the US, which he says will not improve supply chain resilience, and more
On the northwest coast of Taiwan, nestled between mudflats teeming with fiddler crabs and sweet-scented persimmon orchards … Tweets: @_eguevara , @kitevc , @wenyee_lee , @jaihindkb , @joshepayya , @pstasiatech , @charliecamp6ell , @time , and @ali_wyne Tweets: Eduardo Guevara / @_eguevara : From phones to cars and fridges, Taiwan Semiconductor Manufacturing Co. powers the world. This $550 billion firm today controls more than half the global market for made-to-order chips. https://time.com/... Bill Tai / @kitevc : One of planet earth's 10 mmost vvaluable companies.. at ~ $600 Billion.. this is why... https://time.com/... @wenyee_lee : It is amazing to see @TIME successfully got into #TSMC and took these pictures. It is rare for TSMC to say yes. #chip #chipshortage https://time.com/... Stock Pile / @jaihindkb : @narendramodi Sir- Semiconductor chip shortage making auto/electronic industry life miserable. India must explore tie up w/ biggest Taiwan Semiconductor Mfg Co (TSMC) & establish Chip Mfg unit in India. Win win for India and Taiwan. Taiwan will get assured Indian market demand Marino Joseph / @joshepayya : TIME “Taiwan Semiconductor Manufacturing Co., or TSMC, controls more than half the global market for made-to-order chips and has an even tighter stranglehold on the most advanced processors, with more than 90% of market share by some estimates https://time.com/...” Paul Triolo / @pstasiatech : Inside the World's Largest Semiconductor Chip Manufacturer | Time Liu echoes many business executives when he says that the current enmity between the U.S. and China benefits no one. Is anyone in Washington listening? #TSMC https://time.com/... Charlie Campbell / @charliecamp6ell : My feature in @TIME with an exclusive interview with TSMC Chairman Mark Liu. You may not have heard of them, but you are already their customer, guaranteed https://time.com/... @time : Taiwan Semiconductor Manufacturing Co., or TSMC, controls more than half the global market for made-to-order chips and has an even tighter stranglehold on the most advanced processors, with more than 90% of market share by some estimates https://time.com/... Ali Wyne / @ali_wyne : .@CharlieCamp6ell explores TSMC's strategic dilemma. “While American firms account for 65% of all TSMC sales, China is the biggest end destination by virtue of its role as the world's factory, importing around $350 billion worth of chips in 2020 alone.” https://time.com/...
Context & Ripple Effects
TSMC enters this interview as the industry's structural choke point: analysts had already flagged its ~92% share of the world's most sophisticated chips as a systemic economic risk (analysts' warning about TSMC's dominance), and a year earlier the company was caught heeding Washington's dictates on Huawei while trying to keep Chinese customers (squeezed between Trump-era tech policy and its China business). Roughly 65% of its sales go to American firms even though China is the largest end destination for chips — which is why every US policy move lands directly on its order book.
Mark Liu is now pushing back on the premise of the US response itself: that localizing fabrication improves resilience. The argument matters because it contests the framing behind the CHIPS-style subsidy push that later coverage tracks, and it collides with the 'silicon shield' thesis that Taiwan's chip centrality deters conflict (Taiwan's centrality as a deterrent) — if localization proceeds but concentration of advanced nodes does not meaningfully shift, the shield logic stays intact while the economics get worse.
First-order effects
- Liu's public stance puts him directly against the US localization lobby: American customers who depend on TSMC for over 90% of leading-edge supply hear that subsidized US fabs will not buy them real resilience, sharpening the debate inside Washington over what the money should target.
- For TSMC, the interview doubles as customer management — reassuring US buyers who account for ~65% of sales while signaling that China, its largest end market, cannot be treated as severable.
Second-order effects
- If the US builds capacity despite Liu's argument, the likely result is duplicated, higher-cost leading-edge fabs alongside unchanged Taiwanese concentration — raising the industry's total capital burden without removing the single-point-of-failure the FT later examines as the US tries to cut both dependency on Taiwan and China off from key supplies.
- Chinese buyers reading the same signals accelerate domestic substitution efforts, eroding the cross-strait commercial interdependence that currently gives TSMC its leverage with Beijing.
Third-order effects
- The pattern points toward parallel, politically partitioned chip supply chains rather than genuinely diversified ones — resilience measured in node concentration stays low, and the 'silicon shield' becomes less a stabilizer than a countdown clock on interdependence.
- If Liu is right that localization fails on its own metric, the durable fix migrates toward stockpiling, design flexibility, and multi-sourcing at the packaging and materials layers — shifting where governments spend, even as fabs remain geographically concentrated.
The trend: Semiconductor policy is splitting from fab geography: governments are paying for localized capacity while advanced-node production keeps concentrating in Taiwan, making the gap between political resilience and physical resilience the defining tension of the decade.