For technology companies, business has never been as politicized as it is now. Taiwan Semiconductor Manufacturing Company (Taiwan Semiconductor Manufacturing Company) will inject 100 billion U.S. dollars into the new manufacturing plant in the next three years. To this end, the world’s largest contract chip maker is carefully weighing the demand for this capability from the geopolitical competitors that are driving its growth.

An obvious example of trying to balance this balance is Foxconn, the world’s largest contract electronics manufacturer. Four years after it promised to build a huge LCD panel factory in Wisconsin, it is still dealing with the consequences of its failure.

Both Taiwanese technology giants are facing political pressure brought about by the strategic competition between China and the United States. As far as TSMC is concerned, Washington urges more chip manufacturing activities in the United States, at least to provide input for defense-related supply chains.The news is clear enough to convince TSMC put up $12 billion Arizona plants.

Foxconn also feels the competition between China and the United States, and US tariffs and security issues have forced Foxconn to transfer certain product assembly to China. But the original sin behind Wisconsin’s troubles was electoral politics, not broader global tensions.

Foxconn founder Guo Taiming, Inked The transaction took place in 2017. At the time, U.S. President Donald Trump was keen to promote the deal-he narrowly won Wisconsin and hoped to control the state in the hands of the Republican Party in congressional elections.

Patrick Chen, director of Taiwan research at CLSA, a brokerage firm, said: “This is in the interests of both.” “Trump wanted to bring employment and work back to the United States, but Guo Taiming was test Running for president of Taiwan [The deal] Will have a profound public relations impact on his personal image. ”

Analysts believe that the plan is incorrect: LCD manufacturing is a commoditized industry, and even with large subsidies, it will not be less suitable for the high-cost US environment. The suppliers gathered near the Asian LCD manufacturing center are not located anywhere.

Terry Gou’s presidential campaign faltered, and after retiring from Foxconn’s top post, his successor, Yang Liu, was responsible for cleaning up the mess. “We already have land and some factories, so […] I have to find a commercially meaningful way to use it,” Liu told reporters in March. The company currently produces some servers in Wisconsin, and consider Electric vehicles will be produced there from the second half of 2023.

Foxconn cut its investment commitments by more than 90% last month to 672 million U.S. dollars, and its employment commitments were reduced to 1,454 from the original plan of 13,000. Wisconsin is now led by a Democratic governor, rather than approved by the Republican Party. It initially approved generous subsidies that would provide up to $80 million instead of the $2.85 billion originally expected.

TSMC’s situation is no different. Jordan Schneider, an analyst at the consulting firm Rhodium Group, said: “The real business reason is to expand its business scope.” Analysts say that the US base can help TSMC hedge against excessive concentration in Taiwan, which is prone to occurrence. Earthquake, and living under the threat of Chinese invasion. It will also strengthen the company’s position in the competition with its closest competitors Samsung and Intel. Samsung announced earlier this year that it would join the custom chip business. Last year, US customers accounted for 62% of TSMC’s net income.

But despite this, TSMC is still operating in a political environment. Although Washington initially attracted companies to the United States to ensure the security of its defense supply chain, US automakers and members of Congress are still calling for more onshore semiconductors for the automotive industry, which bear the brunt of the current global chip shortage.

Like Foxconn’s LCD idea, this has little commercial significance, because most car chips are manufactured using more mature technologies, and these technologies are usually not installed in new factories. Like the Foxconn plant in Wisconsin, subsidies also play an important role: U.S. legislation Allow US$10 billion in federal subsidies and refundable tax credits for investment in new semiconductor equipment.

Therefore, TSMC is operating cautiously. Although the company continues to focus on manufacturing and R&D in Taiwan, it has opened its doors in the United States. The Arizona factory acquired last year is large enough to expand its operations to the largest factory in its home over time.

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