Taiwan Considers Tighter Export Rules for Advanced Chip Manufacturing
Proposed limits could restrict production of the most advanced semiconductors at overseas fabs, including in the United States
Taiwan Weighs Export Controls That Could Limit Advanced Chip Production Overseas
Taiwan is evaluating tighter export control measures that could restrict the manufacture of its most advanced semiconductors outside the island, a move that may reshape global chip supply strategies and slow the rollout of cutting edge production at overseas facilities.
At the centre of the discussion is a proposed so called N minus two framework, under which only process technologies that are at least two generations behind the most advanced domestic nodes would be permitted for production abroad. If adopted, the policy would primarily affect overseas fabs operated by TSMC, including its expanding manufacturing footprint in the United States.
Protecting Domestic Technological Leadership
The potential controls are aimed at safeguarding Taiwan’s core semiconductor intellectual property and maintaining its technological edge in leading edge chipmaking. Advanced process nodes are widely viewed as strategic assets, underpinning not only commercial competitiveness but also national security and economic leverage.
By retaining the most advanced manufacturing at home, Taiwan would ensure that critical know how, talent and infrastructure remain deeply anchored within its domestic ecosystem. Policymakers see this as essential to preserving long term leadership in an industry where technology gaps are measured in nanometres and years of accumulated expertise.
Implications For Overseas Expansion
For overseas facilities, particularly in the United States, the move could mean a more gradual technology ramp. While mature and near leading edge nodes would still support automotive, industrial and data centre demand, the absence of the newest process generations could limit the strategic role of these fabs in the global chip hierarchy.
Industry analysts note that such a shift may recalibrate expectations around how quickly overseas sites can mirror Taiwan’s most advanced capabilities, potentially affecting customer roadmaps and long term capacity planning.
A Changing Global Semiconductor Landscape
The debate reflects a broader trend of governments reassessing how and where critical technologies are produced. As semiconductors become increasingly central to economic resilience and geopolitical positioning, export controls and localisation strategies are becoming integral to national policy.
While no final decision has been announced, Taiwan’s deliberations underscore the growing tension between global expansion and domestic protection in advanced manufacturing. Any formal adoption of the N minus two approach would mark a significant moment for the global semiconductor industry, influencing investment flows, technology transfer and the future balance of chip production worldwide.
