The Chip Insider®–Trump’s Semiconductor Strategy

President Trump, in one master stroke, completely rewrote America’s national security strategy for semiconductors. It went from wishful thinking and was transformed into a realpolitik industry policy that revolves around a dual-axis of tariffs and TSMC… with the understanding, as he put it, that “without semiconductors, there is no economy.” … Here’s an analytical reverse-engineering of the new administration’s strategy…

How much is in Taiwan versus the US: It's important to realize that a fab’s value ages very fast and its U.S. investments have not come without a cost… That $100B represents half of the expected … So, half of TSMC’s leading edge production will be in the United States by 2029. This beats President Trump’s goal of 40% of worldwide production with TSMC alone, which is double President Biden’s goal. It’s important to note that this disproves the media myth that it’s too costly to manufacture chips in America… If that were true.. tariff threats would not have been threatening at all…

Hope is never a good plan … Realpolitik: Trump said that TSMC is “Far and Away the biggest… Nobody’s even close…” while portraying Intel as having lost it... In the Biden Administration … de facto, Intel was the only choice for national chip champion status… For this to be viable, Intel needed to be more than an IDM. It needed to be in the foundry business… Unfortunately, Trump is not a patient man and he doesn’t have time to wait this out… All he had to do was hold his cards close to the chest, pushing Frank’s hand onto C.C. Wei while threatening high tariffs. For C.C., buying the pot with a $100B raise would be a lot cheaper than taking over Intel’s fabs…

The negotiation is never over: This is very true with Trump, who prefers the stick over the carrot when negotiating. In this case, the carrot is subsidies via the CHIPS ACT and the stick is tariffs… There is still a multi-threat matrix for the US and TSMC. Process nodes come and go. R&D is forever… Just because your fab is manufacturing the most advanced node this year, doesn’t mean it will be doing it in two years. It takes more than capital. It’s all about having an R&D team that develops cost-effective technology for the next node. Fail and you are history, like TI and Motorola.

In summary, Trump’s Semiconductor Strategy now centers on TSMC… Intel… For everything else, there are tariffs.

“A good plan, violently executed now is better than a perfect plan tomorrow." — General George S. Patton