Former U.S. President Trump’s Misunderstanding of Taiwan’s Semiconductor Industry

TAIPEI (Reuters) – Former U.S. President Donald Trump “has a lot on his plate” and misunderstands Taiwan’s role in the semiconductor industry, possibly due to misinformation, said Taiwan’s Economy Minister Kuo Jyh-huei on Monday.

Trump, the Republican nominee for November’s presidential election, unsettled Taiwan by stating in July that “Taiwan should pay us for defence” and claiming it had taken American semiconductor business.

His comments negatively impacted shares of Taiwan’s TSMC, the world’s largest contract chipmaker and a primary supplier for companies like Apple and Nvidia.

Ahead of this week’s Semicon Taiwan exhibition, attended by top executives from TSMC, Samsung, and SK Hynix, Kuo rejected Trump’s claims. “Taiwan did not steal the U.S. chip industry,” he asserted, emphasizing that Taiwan complements the U.S. chip industry through manufacturing and commissioned production.

“This is a misunderstanding on Trump’s part. The president has a lot on his plate; maybe a friend or a competitor in Taiwan told him that,” Kuo said.

TSMC is investing billions to build new factories abroad, including $65 billion for three plants in Arizona, though it plans to maintain most manufacturing in Taiwan. TSMC’s Arizona facilities are vital for the Biden administration’s strategy to strengthen the chip supply chain and reduce dependency on foreign-made chips.

In 2022, the U.S. Congress passed the Chips and Science Act, allocating $52.7 billion to enhance domestic semiconductor output.

Taiwan received robust support during Trump’s administration from 2017-2021, including arms sales—a trend that has continued under President Joe Biden. Trump’s 2016 call to then-Taiwan President Tsai Ing-wen outraged Beijing, as the U.S. does not officially recognize Taiwan’s government, but was welcomed in Taipei. Taiwan’s government firmly denies China’s claims of sovereignty.

(This story has been refiled to say ‘Republican’, not ‘Republic,’ in paragraph 2)