A mainland Chinese official on Wednesday sharply criticized recent statements from Taiwan’s leadership regarding the overseas expansion of Taiwan Semiconductor Manufacturing Company (TSMC), alleging the move deliberately weakens the island’s vital industrial base. Chen Binhua, the spokesperson for the State Council’s Taiwan Affairs Office, asserted at a Beijing press briefing that comments made by Taiwan President William Lai Ching-te and Vice President Hsiao Bi-khim supporting TSMC’s international expansion, particularly in the United States, Japan, and Europe, disguise a betrayal of Taiwanese economic interests.
The controversy centers on remarks made by President Lai in a recent interview, where he framed TSMC’s global strategy—which includes multibillion-dollar fabrication plants (fabs) in the U.S. and Japan—as a means “to promote global prosperity and progress.” However, spokesperson Chen countered this narrative. He suggested that what is being presented as necessary globalization or strengthening U.S. supply chains actually constitutes “sacrificing the interests of Taiwan’s industries, businesses and ordinary citizens.”
The Political Dimensions of Semiconductor Expansion
The debate highlights the deeply political implications of Taiwan’s leading industrial asset. TSMC, the world’s largest contract chipmaker, dominates the global supply chain for advanced semiconductors, which are crucial for everything from smartphones and artificial intelligence to military hardware.
Chen pointed fingers at the ruling Democratic Progressive Party (DPP) administration, claiming the leadership is undermining an industrial foundation built through generations of effort. The mainland’s critique suggests that by facilitating the “exodus” of TSMC’s most advanced manufacturing capacity, the DPP is aligning with foreign strategic interests at the expense of domestic Taiwanese workers and businesses.
This geopolitical tug-of-war over TSMC’s capacity is driven by increasing global demand for supply chain resilience. Following significant semiconductor shortages during the COVID-19 pandemic, countries like the U.S. enacted legislation, such as the CHIPS and Science Act, offering massive subsidies to incentivize foreign chipmakers to build on domestic soil. Taiwan’s government has largely supported TSMC’s moves abroad, viewing it as essential for maintaining economic relevance and security alliances.
Economic Fallout and Domestic Concerns
While global expansion allows TSMC to diversify risk and access new markets, critics in Taiwan and Beijing worry about the potential hollowing out of the island’s domestic high-tech manufacturing sector. The concern revolves around whether the most critical, leading-edge research and production—and the high-paying jobs that accompany them—will eventually follow capacity abroad.
Analysts suggest Chen Binhua’s remarks serve a dual purpose: to criticize the DPP’s economic stewardship and to highlight Beijing’s perception that Taiwan’s current leadership is prioritizing external strategic commitments over domestic long-term economic stability. For Taiwan, balancing the demands of global partners who seek to de-risk supply chains with the need to safeguard its irreplaceable domestic economic cornerstone remains a delicate, ongoing challenge. The implications of this industrial shift will likely shape the economic landscape of East Asia for decades.