Trump sending shockwaves across global chip industry

The recent decline in global chip stocks – with industry giants like ASML, Nvidia, and Taiwan Semiconductor Manufacturing Company (TSMC) taking significant hits – signals more than just market volatility.

Rather, it underscores the critical need for strategic realignment in the face of geopolitical upheaval coming mainly from the US, the world’s largest economy.

The Biden administration is eying a major sweeping crackdown on companies exporting their critical chipmaking technology to China.

Washington’s foreign direct product rule (FDPR), allows the US to implement controls on foreign-made products even if they use the smallest amount of US technology. This can affect non-American firms.

Separate comments from former US president Donald Trump – who now looks likely to win the race for the White House – in an interview have also sent shockwaves through the semiconductor industry.

By suggesting that Taiwan should pay the US for defense and asserting that Taiwan has captured “about 100%” of America’s semiconductor business, Trump has ignited concerns about the future of US-Taiwan relations, the fate of TSMC and the global semiconductor supply chain.

These remarks have cast a shadow over the US’s commitment to defending Taiwan against potential Chinese aggression, creating an environment of uncertainty that has rattled markets.

As the world’s leading semiconductor foundry, TSMC is the linchpin of the global tech ecosystem. Its Taiwan-listed shares recent drop of around 2.4% is a clear indication of investor anxiety.

However, this moment of market fluctuation is not just a challenge but an opportunity for TSMC and the broader chip industry to reevaluate and reinforce their strategic positions. First and foremost, TSMC and