Taiwan Bans TSMC’s 2nm Manufacturing Outside Its Borders, Including the US

Not only does the US government use protectionist measures to maintain its technological edge, but similar measures by the Taiwanese government also impact America’s efforts to attract advanced chip manufacturing.

TSMC’s Role in Taiwan’s Technological Dominance

Taiwan’s finance minister has stated that TSMC cannot manufacture 2-nanometer chips or other advanced technologies outside Taiwan. This means that the facilities TSMC is building in the US will focus on producing less advanced chips, such as 4-nanometer ones—for now.

This restriction comes from Taiwan’s regulations designed to protect its technological leadership. TSMC, the world’s leading chip manufacturer and a key player in Taiwan’s economy, is directly affected by these rules.

Taiwan

The regulations ensure TSMC keeps its most advanced technology within Taiwan, preserving control over cutting-edge chip manufacturing. In the US, TSMC’s facilities will start making 4-nanometer chips this year. However, they won’t be able to produce chips at the 3-nanometer or 2-nanometer level until at least 2028, when new fabs come online. Meanwhile, TSMC’s Taiwan plants will already be manufacturing chips at these advanced nodes.

CHIPS

This creates a challenge for the US. Despite offering TSMC about $6.6 billion under the CHIPS program to encourage domestic manufacturing, Taiwan’s restrictions mean the most advanced chip production will stay on its shores. This limits the direct impact of US efforts to secure leadership in semiconductor technology.