Few presidents would do what Donald Trump is doing. During the election campaign, what he urged was to levy 60% tariff on China. After he won the election, he changed to levy 25% tariff on Canada and Mexico. After swearing in, he added to levy 100% tariff on Semiconductor of Taiwan.
When 100% tariff is levied on TSM, those who pay this will be AAPL, TSLA, NVDA, INTC…..etc. Therefore, Trump is asking TSM to form a new independent company with INTC. Mind that both TSM and INTC are competitors in the market. Recent years because of the rise of TSM, the stock price and earnings of INTC dropped continuously. Asking TSM to form a new company with INTC actually is to save INTC from collapsing.
Now TSM occupies 90% of the production of high end chips. When they form a new firm with INTC, the latter would not transfer American technology to a foreign company, but can ask TSM to transfer their technology to US. TSM is now running a factory in Arizona, originally the plan is to establish 6 plants, but now only one is running simply because the cost is quite high. They would not working for 24 hours as in Taiwan. Now the Arizona plant is producing 5nm chips, and this year will step into 4nm, but in Taiwan, they are producing 3nm and 2nm chips and 1.2 nm chips will come out this year.
Taiwan holds the throat of chips production, if they completely moved to US, when China attacks Taiwan, US need not to protect them, or when Taiwan is defeated even TSM destroy the whole plant, they would not afraid. Some YouTuber said it is not a moving nor transfer of technology, it’s a robbery of Trump. If TSM does not transfer their technology freely to US, they will levy 100% tariff. Actually too cheap, the petroleum of today and tomorrow only worth 100% tariff and not 1000%? Should ask Elon Musk to do the auditing at once!