America has a Big Tech problem. An oligarchy of powerful, trillion-dollar companies wields tremendous control over the digital ecosystem, affecting the information we see, the products we buy, the candidates we vote for, and how we live our daily lives. Behind closed doors, these brand-name entities use their market dominance and deep pockets to protect their interests, not consumers.
Today, the U.S. faces another monopoly threat that involves the hardware that’s in virtually all modern electronics: semiconductors. Policy meant to generate domestic production of these vital components —that is, the CHIPS Act — inadvertently profited foreign suppliers and further entrenched the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company, which received more than $6 billion in U.S. taxpayer subsidies.
TSMC’s global dominance is so massive — and its US presence is growing — that the only way to check its global monopoly is to level the scales for domestic chipmakers.
President Trump called out the flawed logic of giving taxpayer money intended to promote U.S. production to our biggest foreign competitor. “We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here,” he told Joe Rogan last fall. “These chip companies, they stole. They stole 95% of our business. … [And now] they want protection.”
TSMC dominates the global semiconductor market, and, to borrow a Trumpism, it is eating America’s lunch. TSMC commands over 60% of the total global semiconductor market and makes more than 90% of the world’s most advanced chips. Meanwhile, Intel — once a national icon and our closest answer to TSMC — has fallen sorrowfully behind and is a “shell of its former self,” despite receiving the largest chunk of CHIPS funding.
The lack of a domestic alternative — or any friendly alternative outside of Taiwan — is a huge risk for the world as China ramps up its rhetoric.
Semiconductors power the devices we use, from smartphones to washing machines, as well as major networks, like banking. More than one trillion semiconductors were shipped worldwide in 2021, and that number has likely grown since. TSMC’s choke hold on this vital industry has earned it the moniker, “The most important company in the world.” It would be more fitting to call it the most dominant monopoly in the world.
TSMC’s playbook is obvious: Secure major deals with America’s largest companies, dominate the market with its chips, and push out U.S. competitors that lack the same scale and resources. Just look at its contracts. Apple inked a deal with TSMC in 2023 to buy all of its three nanometer chips. Amazon’s AWS and AI chips are made exclusively by TSMC. And Nvidia is in talks with TSMC to develop its advanced chips.
We can’t build our own semiconductor industry from ground zero, our workers need the experience to do it. However, policymakers should be wary of any company that exerts such unilateral control over a commodity that touches every aspect of daily life. TSMC’s geography and geopolitics make it especially troublesome.
TSMC is headquartered in Taiwan, where as much as 90% of its production capabilities are located. China has long laid claim to Taiwan and refuses to acknowledge the country’s sovereignty. The Chinese government has conducted military exercises to test its “seizure power.” Just this month, a Chinese vessel cut an undersea fiber optic cable in an apparent act of sabotage, and in a New Year’s Eve speech, Chinese leader Xi Jinping said no one can stop China’s “reunification” with Taiwan.
It’s not a matter of if China acts but when. Whether military action, technological warfare and sabotage, or a combination of both, such aggression would inevitably disrupt, if not sever, the U.S. semiconductor supply chain. As two researchers opined in the New York Times recently, the result could be “a global economic crisis far worse than the shock caused by the COVID-19 pandemic.”
It’s time policymakers get tough and hold TSMC accountable to the geopolitical situation. Fortunately, President Trump has the chops to do it. He has been vocal about using tariffs to stop the flood of foreign-made chips and support U.S.-based manufactures. “You didn’t have to put up 10 cents,” he said on Joe Rogan’s podcast. “You tariff [foreign chips] so high that they will come and build their chip companies for nothing.”
President Trump is right. He should encourage antitrust regulators to keep an eye on TSMC’s practices. TSMC’s global dominance is so massive — and its U.S. presence is growing thanks to the CHIPS Act — that the only way to check its global monopoly is to level the scales for domestic chipmakers. President Trump should ensure that TSMC’s practices in Arizona are in good faith. The company should make commitments to train American workers, honor collective bargaining agreements, and commit long-term to investing in facilities and advanced chip development in the United States — not just in Taiwan.
The federal government must also make a concerted effort over the next decade to ensure American companies are up to the challenge. We must invest in an educated engineering workforce and streamlined facilities and encourage capital investment in domestic manufacturing.
TSMC has steadily tightened its grip on the U.S. semiconductor market for decades. It’s time policymakers get serious and hold TSMC to higher standards and work to support our own struggling industries. Otherwise, America could face a supply-chain crisis and economic recession of China’s (or Taiwan’s) doing — which is hardly the time to be asking how to rebuild our domestic semiconductor industry.
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