Silicon Valley might be the pulse of global technology, but its heartbeat is powered by tiny, intricate microchips—most of which are crafted far from California, in a science park nestled on Taiwan's west coast. For nearly forty years, the Taiwan Semiconductor Manufacturing Company, better known as TSMC, has been the quiet giant behind the world’s most advanced chips, supplying the essential components that make modern smartphones, cars, and even artificial intelligence possible.
Yet, as the world’s political winds shift and tensions rise across the Pacific, TSMC finds itself at a crossroads. According to Beritaja and NPR, the company produces over 90% of the world’s most advanced microchips—a staggering figure that underscores its pivotal role in the global supply chain. But with the U.S.-China rivalry intensifying, these chips have become more than just technological marvels; they are now seen as strategic assets, crucial to national security and military technology, especially as artificial intelligence takes center stage.
Beijing has been ramping up political pressure on Taiwan, and TSMC’s headquarters, along with much of its manufacturing infrastructure, sits less than 100 miles from China, just across the Taiwan Strait. For years, the semiconductor industry was considered Taiwan’s “silicon shield,” a kind of technological deterrent believed to discourage direct confrontation. But with new geopolitical realities emerging, TSMC is looking beyond its island home for the first time in a meaningful way.
Wendell Huang, TSMC’s Chief Financial Officer, puts it simply: “As a company, all we can do is focus on our fundamentals: technology leadership, manufacturing excellence, and then the customers’ trust. We don’t know politics. That’s between the governments.” But as NPR points out, politics have undeniably shaped the landscape in which TSMC operates. Many of TSMC’s customers—including major equipment suppliers, chip designers, and hardware companies like Applied Materials and Qualcomm—have offices in the same science park in Taiwan, keeping them close to their chip supplier. Now, those customers want TSMC to come closer to them.
Back in 2020, as calls to “reshore” chipmaking in the United States grew louder, TSMC announced plans to build semiconductor fabrication plants—known as fabs—in Arizona. The first of these facilities ramped up to high-volume production in late 2024. But that’s just the beginning. TSMC has plans for a total of six semiconductor fabs, two advanced packaging facilities (where chips are assembled into sets), and a research and development center in Arizona. The company is also expanding its presence in Japan and Germany, signaling a new era of global reach.
“Seventy percent of our revenue is from the U.S., and most of these customers want advanced technology,” Huang explained. “Therefore, we are expanding in Arizona the advanced technology fabs.” The U.S. government has not been shy about encouraging this shift. The Biden administration’s CHIPS Act allocated up to $6.6 billion in incentives to support chip production on American soil, part of a broader push to ensure high-end chips stay out of China’s hands and within friendly borders. In early April 2024, TSMC responded by announcing it would increase its U.S. investments to $65 billion, a move that could put Arizona on track to produce about one fifth of the world’s most advanced chips by 2030.
The Trump administration, too, has kept up the pressure, using a mix of incentives and restrictions to encourage chipmakers to build in the United States. In September, the U.S. government even took a 10% stake in Intel, and Nvidia agreed to give the U.S. 15% of the Chinese sales of its advanced H20 chip earlier this year. But when asked if this political pressure was the driving force behind TSMC’s expansion, Huang was clear: it’s all about demand. “Let me put it this way, we’re also expanding, or speeding up, our Arizona fab,” he said. “We’re trying to upgrade to more advanced technologies faster. And those are all because of customers’ choice, customers’ demand.”
That demand has reached a fever pitch, especially for chips made in the USA. In mid-October 2025, TSMC reported that its latest quarterly revenue was up over 30% from the same period the year before, with profits leaping almost 40%. The main driver? High-performance computing chips used in artificial intelligence. “We do observe a very positive or even stronger demand for AI products,” Huang noted, adding that the company believes this “megatrend” will continue. With hundreds of billions of dollars already invested in AI data centers—and trillions more projected—TSMC’s chips have become the backbone of the digital age.
TSMC’s unique business model has helped it weather these turbulent times. The company pioneered the “pure play foundry” approach: it doesn’t design its own chips, but instead manufactures chips for other firms, including tech heavyweights like Apple, Sony, and Nvidia. According to Huang, this model, combined with TSMC’s technological leadership, has built deep trust with its more than 500 customers. “The good thing about foundry in our business with 500 customers is that you cast a wide net. You don’t know who’s going to be the winner in the next 10 years or 20 years,” he explained. “But basically you are serving all of them, the potential winners.”
Yet, the decision to expand overseas isn’t just about geopolitics or customer proximity. Taiwan is a small island with limited resources—land, water, and power are all at a premium. “This is a small island. Resources are limited. So we need to expand overseas,” Huang said. By tapping into new pools of talent and accessing open land and vital utilities abroad, TSMC is positioning itself for sustainable growth.
Despite its global ambitions, TSMC insists it will maintain a strong home base in Taiwan, continuing to support advanced research and manufacturing on the island. “We will still have a home base in Taiwan,” Huang affirmed. The company sees its international expansion not as a replacement, but as a necessary evolution in a world where technology, politics, and business are increasingly intertwined.
As the world’s reliance on advanced chips only grows, TSMC’s journey from a local science park in Hsinchu to a global powerhouse encapsulates the challenges and opportunities of our interconnected age. The company’s ability to adapt—balancing customer demand, geopolitical realities, and resource constraints—may well determine not just its own future, but the trajectory of the entire technology sector.
