US Researcher Rejects Trump's Taiwan Chip Rivalry Narrative

Partnership Over Competition

A senior fellow at a Washington-based research institute has pushed back against characterizations of Taiwan as a competitor in the semiconductor industry, describing the relationship between Taiwanese and American chip firms as fundamentally collaborative rather than adversarial.

Michael Cunningham of the Stimson Center stated that American companies continue to dominate semiconductor design while contracting manufacturing to Taiwanese foundries. "It's a partnership that has served the US and its semiconductor businesses very well," Cunningham wrote in correspondence addressing recent statements from the White House.

The comments respond to claims made in a July 2 CNBC interview in which President Donald Trump asserted that Taiwan had "literally took 100 percent" of the semiconductor business. Trump predicted the US would capture 40 to 60 percent of chip manufacturing before the end of his term.

Manufacturing Reality

Cunningham dismissed the feasibility of such a dramatic shift in global production footprints. Taiwan's established semiconductor ecosystem enables fabrication at lower costs, higher quality, and greater scale than American facilities can currently match, according to the researcher.

Taiwan Semiconductor Manufacturing Co is expanding operations in the United States, but these projects represent new capacity rather than relocation, Cunningham noted. The world's largest contract chipmaker continues building additional fabrication plants in Taiwan as global demand rises.

The researcher characterized Trump's projection of achieving 40 to 60 percent domestic manufacturing share as unrealistic within a four-year timeframe. Taiwan's semiconductor infrastructure, developed over decades, cannot be replicated quickly enough to enable a substantial reduction in American reliance within the next several years.

Bipartisan Concerns

While the rhetoric differs, concern about dependence on Taiwanese semiconductor production spans both major American political parties. The Trump administration and the previous Biden administration have pursued domestic manufacturing expansion through different policy mechanisms, Cunningham observed.

The focus on Taiwan reflects broader anxiety about deindustrialization and vulnerability in critical supply chains. Semiconductors power everything from consumer electronics to military systems, making geographic concentration of production a strategic concern for policymakers across the political spectrum.

Cunningham suggested the repeated focus on Taiwan stems from desire to reverse the hollowing-out of American manufacturing capacity that accelerated in recent decades. Chips represent one of the most visible and economically significant categories where offshore production dominates.

Design Versus Fabrication

The division of labor in the semiconductor industry separates intellectual property creation from physical manufacturing. American firms including Qualcomm, Nvidia, and AMD design cutting-edge processors but contract out fabrication to specialized foundries.

This model emerged as semiconductor manufacturing became extraordinarily capital-intensive, requiring multi-billion-dollar facilities and complex supply chains. Taiwanese firms invested heavily in fabrication capacity while American companies focused on design, software, and architecture.

The arrangement has allowed American chip firms to remain profitable and innovative without bearing the full cost of maintaining leading-edge manufacturing infrastructure. Taiwanese foundries, meanwhile, serve customers globally while building technical capabilities that would be difficult for competitors to match.

Strategic Implications

In an article published last month, Cunningham argued that "America's chip future still runs through Taiwan," emphasizing that partnership with Taiwanese manufacturers remains essential to US industrial objectives.

The statement underscores the complexity of reshoring efforts. While political leaders in Washington advocate for domestic production, the technical and financial barriers to replicating Taiwan's semiconductor ecosystem remain formidable.

American efforts to expand chip manufacturing have centered on the CHIPS and Science Act, which allocated tens of billions in subsidies and tax incentives. TSMC, Samsung, and Intel have announced major fabrication projects in Arizona, Texas, and Ohio, though these facilities will take years to reach full production.

The plants under construction will primarily focus on advanced logic chips for computing and artificial intelligence applications. Much of the global semiconductor market consists of mature-node chips for automotive, industrial, and consumer applications, categories where Asian manufacturers maintain dominant positions.

Regional Dynamics

Taiwan's role in global semiconductor supply chains has made the island a focal point of US-China competition. Beijing views Taiwan as part of its territory and has not ruled out using force to achieve unification, while Washington maintains informal security commitments and supplies defensive weapons.

The concentration of advanced chip production in Taiwan creates potential vulnerability if cross-strait tensions escalate. American and European officials have cited this geographic risk as justification for subsidizing domestic manufacturing capacity.

Taiwanese officials have described the island's semiconductor leadership as "silicon shield," arguing that global dependence on Taiwanese chips gives other nations incentive to prevent conflict. The government in Taipei has welcomed foreign investment while emphasizing that core research and development will remain on the island.

Cunningham's analysis suggests that despite political pressure and financial incentives, the fundamental structure of the semiconductor industry is unlikely to shift dramatically in the near term. Design and manufacturing will likely remain geographically separated, with Taiwan retaining its position as the dominant location for contract fabrication.