Taiwan Tech & Innovation — 2026-07-28

Key Highlights

Geopolitical Pressure on TSMC

In the freshest development, China's Ministry of Commerce is reportedly considering export controls that would bar TSMC and Qualcomm from manufacturing chips based on Huawei designs, according to a Financial Times report cited on July 28. This represents a direct counter to U.S. restrictions on advanced chip exports to China and adds another layer of complexity to TSMC's already strained position between Washington and Beijing. Despite the threat, analysts argue the bull case for TSMC remains intact due to its irreplaceable role in the global AI chip supply chain.

Taiwan's NT$100 Billion AI Push

Taiwan President Lai Ching-te announced that the government has allocated NT$100 billion (approximately US$3.1 billion) to support the Ten AI Initiatives Promotion Plan, aimed at transitioning Taiwan from hardware advantage to AI application leadership. The move reflects recognition that Taiwan must evolve beyond being a chip manufacturer to become an AI innovation hub.

TSMC's $100 Billion U.S. Investment Proceeds

TSMC announced an additional $100 billion commitment to U.S. manufacturing, bringing total planned investment to $200 billion since Trump returned to power in 2025. The funding will result in four additional advanced semiconductor manufacturing facilities in Arizona, according to Supply Chain Dive. However, analyst concern persists around heavy spending and the impact on profitability margins, with Trump administration pressure pushing the company to localize production capacity.

Analysis

Taiwan remains central to the global AI chip ecosystem, but faces mounting pressure from both Beijing and Washington. The country's $200 billion shift toward the U.S. reflects geopolitical realpolitik—companies must choose sides. Simultaneously, Taiwan's government recognition that hardware alone is insufficient positions the nation to capture higher-margin AI software and services opportunities. The NT$100 billion AI allocation signals confidence that Taiwan can compete in AI application development, not just manufacturing.

What to Watch

• China's formal export control announcement on Huawei chip designs (expected within weeks)
• Taiwan's advanced packaging capacity expansion to meet AI accelerator demand
• Q3 2026 earnings from TSMC (guidance on 2nm production ramp and U.S. fab timelines)
• Taiwan AI initiative funding disbursement to startups and enterprises