Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) remains at the heart of U.S.-Taiwan trade talks as they explore a U.S. chip production strategic partnership while preserving Taiwan’s global supply chain moat.
Amid Washington’s push to strengthen domestic semiconductor capacity, Taiwan signaled openness to expanding investment in the U.S. under a “Taiwan model,” while continuing to root core semiconductor production at home.
Taiwan signaled on Thursday that it may form a high-tech strategic partnership with the U.S., as Washington pushes for greater Taiwanese investment, according to the island’s top tariff negotiator.
Also Read: Why Washington Wants Half Of America’s Chips Made Locally
Vice Premier Cheng Li-chiun, who leads the tariff talks, said she remains optimistic about reaching a consensus with the U.S. under a so-called “Taiwan model,” Reuters reported on Thursday.
Rather than shifting supply chains out of the island, the model would expand U.S. production capacity through industrial investment planning, backed by export credit guarantees and joint Taiwan-U.S. cluster development.
Taiwan Semiconductor stock has gained over 46% year-to-date as key contract chipmaker for companies including Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL).
The U.S.-Taiwan trade talks come as Taiwan, home to Taiwan Semiconductor continues to run a sizable trade surplus with the U.S., where its exports face a 20% tariff. Taipei is seeking tariff cuts as part of negotiations.
“The United States expects us to expand investments and engage in supply chain cooperation,” Cheng told reporters in Taipei. She emphasized that Taiwan’s strategy is to “remain rooted in Taiwan and deploy around the world” while deepening bilateral cooperation.
Taiwan Semiconductor, already investing $165 billion to build advanced fabs in Arizona amid booming demand for AI chips, was not part of the recent talks. Cheng also dismissed U.S. media reports of Commerce Secretary Howard Lutnick proposing a 50-50 chip production split.
Meanwhile investors remained divided over geopolitical tensions.
Steve Weiss, the chief investment officer and founder of Short Hills Capital Partners, trimmed his stake in Taiwan Semiconductor after the position grew too large from years of accumulation.
He also cited rising geopolitical risks as a reason for caution, pointing to what he called an “incongruity” in the market.
This contradiction is seen in defense stocks like Lockheed Martin (NYSE:LMT) and Northrop Grumman (NYSE:NOC) rallying on increased missile production tied to U.S. support for Ukraine and Israel, at the same time that Taiwan Semiconductor’s shares also climbed despite its operations being at “ground zero” for potential conflict with China.
Price Action: TSM stock was trading higher by 1.22% to $292.00 premarket at last check Thursday.
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