TSMC to Segregate AI Production to Counter US and China Tensions

TSMC will only produce chips for artificial intelligence (AI) in the US, South Korea, and Japan in an effort to reduce tensions between the US and China, according to a report by Politico, citing a Taiwanese government official. This strategic move is seen as a way to alleviate concerns from the US government and its allies, who have raised security concerns regarding TSMC's production in Taiwan. TSMC has already agreed to build a new chip factory in Arizona to support the Biden administration's effort to strengthen the US's position in the global semiconductor industry. Meanwhile, TSMC has also announced plans to establish a new plant in South Korea. The company will use its facilities in South Korea for the production of AI chips, as well as for the production of chips for military use. The move aligns with the strategy of the Taiwanese government, which aims to diversify its economy and reduce its reliance on the US. As tensions between the US, Taiwan, and China continue to escalate, this strategic move could help alleviate some of the pressure while also supporting the growth of the global semiconductor industry.