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Taiwan economics minister warns new security laws may push chip R&D overseas
Wednesday, February 25, 2026 at 02:06 AM
Taiwan's Economics Minister Kung Ming-hsin cautioned that a proposed National Security Act could inadvertently push advanced semiconductor research and development to overseas locations, potentially weakening the local industry and its 'Silicon Shield' strategic importance. The minister stated that current regulations are sufficient to protect national interests without risking isolationism in the global chip supply chain.
Context
Taiwan’s opposition party, the KMT, has proposed a “Chip National Security Act” to restrict overseas fab expansion and advanced technology exports. The legislation seeks to mandate legislative approval for moving manufacturing processes abroad, aiming to preserve Taiwan’s dominance in the $500 billion semiconductor industry. The move directly responds to TSMC’s massive global diversification, including over $65 billion committed to the United States and new projects in Japan and Germany, which some local lawmakers fear will erode Taiwan’s strategic “Silicon Shield.”
This bill introduces significant political risk for TSMC and its primary clients, including Nvidia and Apple. If passed, the law could stall the deployment of 2nm and 3nm nodes at international sites, potentially disrupting the global AI supply chain. As the KMT holds a legislative plurality, investors must weigh the potential for increased friction in TSMC’s multi-year plan to localize production for Western markets while maintaining its technological edge at home.
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