TSMC's 2nm Leak: Test for U.S.-Japan-Taiwan Semiconductor Cooperation
United Daily News Commentary, August 6, 2025
President Donald Trump has announced that the Taiwan Semiconductor Manufacturing Company (TSMC) will invest $300 billion in the United States, a move that may be linked to U.S.-Taiwan tariff negotiations, though the outlook is far from optimistic. An even greater crisis, however, is the theft of TSMC’s 2-nanometer chip manufacturing process. While the case is being prosecuted under Taiwan’s National Security Act, the key question is the identity of the shadow player — and it is possible the Lai administration will not dare pursue the matter to the very end.
The Japanese and Taiwanese companies involved are both pillars of the U.S. semiconductor security strategy, and the stolen 2nm process is a critical battleground in the U.S.-China technology competition. It can be regarded as the core threshold for high-end computing and defense chip supremacy over the next decade.
President Lai Ching-te has stated that Taiwan’s 20-percent U.S. tariff should be negotiated in conjunction with Section 232 issues and other supply chain matters to secure a tariff reduction. Minister of Economic Affairs Kuo Jyh-huei floated a trial balloon suggesting a $400 billion purchase in exchange for lower tariffs, but private sector voices have already questioned whether such a deal would be worthwhile. Based on Mr. Trump’s remarks and those of the U.S. Trade Representative Jamieson Greer, the likelihood of adjusting the 20-percent tariff appears low. In Mr. Trump’s eyes, TSMC’s move to the United States remains the focus, with Taiwan itself absent from the equation. President Lai’s hope of using the semiconductor supply chain as a bargaining chip may prove one-sided wishful thinking.
TSMC is the ballast stone of Taiwan’s strategic value, but it has already been targeted by Trump. Misfortunes seldom come singly — Taiwan must not only guard against the seizure of its crown jewel but also against its theft.
The 2nm process theft involves an employee of Tokyo Electron Limited (TEL), formerly of TSMC, who acted through two TSMC engineers. Notably, TEL is a semiconductor equipment company similar to TSMC in being heavily influenced by U.S. capital, markets, and technology. TEL is also a partner in TSMC’s Kumamoto plant in Japan. The difference lies in that TSMC’s reliance on the United States is on the “orders side,” while TEL’s is on the “equipment procurement side.” Furthermore, TEL is an important part of the U.S.-Japan semiconductor alliance and must cooperate with both governments, whereas TSMC’s role as a key partner in the U.S. semiconductor strategy is strictly corporate, with no influence from Taiwan’s government.
The core project of the U.S.-Japan semiconductor alliance is the creation of Rapidus, a company dedicated to 2nm semiconductor manufacturing. The United States is not only providing technical support but also viewing it as essential to securing the supply chain and restricting China’s advanced process capabilities, with the goal of mass-producing 2nm chips by 2027. TEL is a major partner in Rapidus’s advanced process production, helping reduce the alliance’s dependence on Dutch supplier ASML.
In short, the first pillar of the U.S. semiconductor strategy is TSMC, which possesses the most advanced process technology. Its American plants have begun trial production of 2nm chips, and in July the company announced it would accelerate construction of its third wafer fab, which will use 2nm and A16 technology and aims to enter 1.4nm production by 2027. The second pillar is Rapidus, the “second source” of advanced processes jointly built by the United States and Japan, with an almost purely Japanese pedigree, intended to diversify reliance away from TSMC and European equipment suppliers.
Coincidentally, Rapidus’s 2nm project also achieved trial production in July, taking only one-third the time that TSMC required, with a technological gap that is relatively close. Both have set 2027 as their milestone year, drawing industry attention. This is the greatest mystery behind the theft case and urgently needs clarification.
Minister Kuo has admitted that for the next decade, TSMC will dominate the “martial arts world” of semiconductors — unless all six of its U.S. wafer fabs are completed and Taiwan’s semiconductor supply chain is relocated to the United States, something that might happen in seven or eight years. But such optimism appears premature, as the United States already has a second succession plan in place. If the industrial espionage is connected to the U.S.-Japan alliance, it would pose a severe challenge to U.S.-Taiwan semiconductor cooperation.
With both robbery from the front and theft from behind, in less than seven years TSMC’s dominance could face an “uprising against the master” in an unfair competition. Has the Lai administration ever conducted war games for such an “enemy at Honno-ji” scenario?