Government bans TSMC from manufacturing 2nm chips outside Taiwan

The Taiwanese government has banned TSMC, the world’s largest semiconductor manufacturer, from producing its 2-nanometer chips outside Taiwan.

The measure aims to protect the company’s cutting-edge technology, considered strategic for maintaining Taiwanese leadership in the semiconductor sector. According to JW Kuo, Taiwan’s Minister of Economic Affairs, TSMC can continue to expand its international operations, but will not be able to transfer its most advanced technologies to facilities outside the country.

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The decision was announced after a toughening of the government’s discourse regarding TSMC’s international expansion. The company had already begun building factories in the United States, Germany and Japan, encouraged by generous subsidies offered by those countries. However, TSMC’s international factories are expected to be limited to less advanced technologies, while 2nm chips, currently the company’s most modern lithography, will be produced exclusively in Taiwan.

Wu Cheng-wen, Taiwan’s Minister of Science and Technology, expressed support for TSMC’s expansion initiatives, but reinforced the importance of protecting the most sensitive technologies within Taiwanese territory. The strategy aims to ensure that TSMC’s critical knowledge and technological capabilities remain under local control, avoiding technology transfer risks that could compromise Taiwan’s strategic position in the global market.

The 2nm chips, which utilize ASML’s extreme ultraviolet (EUV) lithography technology, are seen as a key piece of the industry’s future. Taiwan fears that the transfer of these technologies could diminish its competitive advantage in an increasingly tense global scenario, especially amid geopolitical concerns involving China and the United States. According to Kuo, “TSMC will be able to manufacture 2nm chips in the open air only when even more advanced lithography is available, such as the 1.4nm A14, expected in 2028“.

With the ban, the Taiwanese government seeks to maintain technological advantage and prevent TSMC’s most critical capabilities from being developed outside the country. The measure also reinforces Taiwan’s strategic importance in the global semiconductor chain, ensuring that the island remains a central point in the supply of advanced technology, essential for various industries, from mobile devices to artificial intelligence applications.

Source: Xataka