Truth Behind Trump’s Taiwan 20% Tariff: TSMC, Energy Crisis, and the Future of Global Tech (feat. Apple, Intel, China, Semiconductor War, and aI)

In Asia, Taiwan’s tariffs are way higher than everyone else—while Japan and South Korea sit at 15%, Taiwan’s got a massive 20% tariff from the U.S.

But what’s really going on here? How is this tariff shaking the very foundations of global tech? From TSMC to Apple, Intel, and even China, the stakes couldn’t be higher. Is this just a temporary bump, or is Taiwan headed straight for a major trade showdown? Keep reading to uncover the hidden truths behind the tariff wars and what’s at stake for the future of tech and global power.

TSMC: The Taiwanese Giant That Doesn’t Play by the Rules

1. TSMC was founded as a state-owned enterprise in Taiwan in 1987.
2. It was privatized in 1992, but the Taiwanese government still owns 7% of shares, so they remain a major player.
3. TSMC’s big advantage? It sticks to what it knows best: making semiconductors based on designs from other companies. No diversions.
4. Their motto? “We don’t compete with our customers.” It’s all about making chips, not creating rival products.
5. Not competing means no semiconductor R&D; they just manufacture the designs others give them.
6. If you look at manufacturing history, many companies started by producing others’ products, then later transitioned to their own innovations.
7. For Apple, outsourcing production to Samsung posed a risk: sharing tech with a competitor in the mobile phone market.

No Competition, Just Collaboration: TSMC’s Key to Success

8. Since TSMC insists on only doing contract manufacturing, Apple feels more secure trusting them with their orders, knowing TSMC won’t become a competitor.
9. Apple’s shift from Samsung to TSMC as a contractor marked the turning point that fueled TSMC’s growth.
10. TSMC’s rise is also influenced by Intel becoming a more prominent variable.

Intel, Samsung, and TSMC: The Epic Semiconductor Showdown

12. A few years ago, the semiconductor “war” was a three-way race between Samsung Electronics, TSMC, and Intel.
13. Back then, most analysts were skeptical about Intel’s challenge with its 2-nanometer technology.
14. Ultimately, Intel’s attempt with 1.8-nanometer technology ended in failure.
15. After pouring significant resources into 1.8-nanometer, Intel turned to losses, and discussions about selling its foundry business started to emerge.

The Power Play: U.S. Government and the Semiconductor Shuffle

16. From the U.S. government’s perspective, they prefer U.S. companies operating factories in the U.S. over foreign companies setting up plants there.
17. Even though Intel is struggling, abandoning the company outright is not an easy decision.
18. This is the context behind ASMC’s emergence in the Taiwan-U.S. tariff negotiations.
19. ASMC is a company name derived from TSMC, replacing the “T” for Taiwan with “A” for America.
20. The U.S. reportedly told Taiwan that in order to lower tariffs to 15%, they would need to set up a joint venture where Intel owns 51% and TSMC owns 49%.

Taiwan’s Energy Crisis: TSMC’s Power Hunger

21. This information was shared in a private meeting by Taiwan’s Economic Minister, Kuo Tsuo-hui, making it highly likely to be true.
22. Taiwan is reportedly willing to accommodate investments and open markets, including importing U.S. cars and buying LNG from Alaska, but they couldn’t agree to this tariff proposal.
23. Looking at Taiwan’s national interest overall, expanding TSMC’s factories there is becoming increasingly problematic.
24. The main reason is that Taiwan’s electricity supply is dwindling, with rapidly increasing demand for power.
25. The rapidly growing electricity demand in Taiwan is driven by semiconductor companies like TSMC.
26. As of 2025, TSMC uses 12.5% of the entire electricity supply in Taiwan.
27. If the ongoing expansions of TSMC’s factories continue, by 2030, it’s expected that TSMC will consume 24% of Taiwan’s total electricity.

Power Struggles: Taiwan’s Looming Energy Crunch

28. It’s not just TSMC—Taiwan’s industrial power demand overall is increasing quickly.
29. Taiwan’s semiconductor industry, a major pillar of its economy, consumes an enormous amount of energy.
30. In May 2024, President Lai Ching-te declared in his inaugural speech that Taiwan would become an “AI island.”
31. While the direction seems promising, the problem is that AI consumes a lot of electricity.
32. Taiwan’s electricity demand is rising fast, and electricity prices are starting to increase as well.
33. One of Taiwan’s competitive advantages has been its low electricity rates.
34. Comparing the industrial electricity rates (as of late 2023), the U.S. charges about 10-12 cents per kWh, while Taiwan is still cheaper at about 7-8 cents.

The Rising Cost of Power: Taiwan’s Shifting Energy Landscape

35. Even for large-scale factories that require high-voltage electricity, the U.S. typically charges more than Taiwan, making Taiwan more attractive in terms of energy costs.
36. If an industrial plant uses 10 million kWh of high-voltage electricity per month, the U.S. could charge over $1 million, while Taiwan’s would be lower at around $800K.
37. While Taiwan’s electricity rates appear much lower, it’s important to note that these rates have risen significantly.
38. Taiwan’s industrial electricity rates increased by 15% in 2022 and by 17% in 2023, with ongoing hikes every year.
39. Even after 2024, Taiwan’s industrial electricity rates continue to rise.
40. In 2024, rates increased by an average of 15%, with some cases reaching 25%, and in 2025, they’re expected to rise by another 10%.

The Nuclear Gamble: Taiwan’s Energy Future at a Crossroads

41. Semiconductor companies like TSMC, which use a lot of electricity, faced the highest increase—25%—in 2024, raising their electricity costs.
42. The government is increasing electricity rates for industrial use rather than residential use, aiming to minimize the impact on households.
43. Even though Taiwan raised its electricity prices, as of 2024, Taiwan’s industrial electricity rates were still cheaper than those of the U.S. by about 10-15%.
44. With the additional electricity price hike in 2025, the price gap between Taiwan and the U.S. in terms of industrial electricity rates is nearly eliminated.
45. One of TSMC’s advantages—its lower electricity rates compared to competitors—has now almost disappeared.

Taiwan’s Bold Move: Phasing Out Nuclear Power

46. The rise in Taiwan’s electricity rates began in 2016.
47. In January 2016, Taiwan’s Democratic Progressive Party (DPP) took power and started pushing for a phase-out of nuclear energy.
48. After a massive earthquake hit both Japan and Taiwan, President Tsai Ing-wen announced plans to phase out nuclear power by 2025.
49. Tsai Ing-wen proposed that Taiwan would replace nuclear power with a mix of 50% LNG, 30% coal, and 20% renewable energy.
50. At that time, Taiwan had six operating nuclear reactors, and a new nuclear plant was under construction in New Taipei City.

Earthquakes, Power Shortages, and National Security: Taiwan’s Tightrope Walk

51. Taiwan’s vulnerability lies in its dependence on LNG for power, which is why China is conducting military drills aimed at blocking Taiwan’s energy supply.

52. Five of these six reactors began shutting down gradually between 2019 and 2024.

53. The construction of the new plant in New Taipei was halted when it was over 90% complete.

54. On May 17, 2025, Taiwan’s last operating nuclear plant, Maanshan No. 2, was shut down, officially making Taiwan a nuclear-free country.

55. While the nuclear phase-out followed the plan, the problem is that the expected amount of energy from renewable sources hasn’t been achieved.

56. Taiwan had set a target to get 20% of its energy from renewables by 2025, but the current figure is only 9.5%.

57. Due to the environmental concerns, Taiwan has also been reducing coal power, and now 90% of its electricity is produced using LNG.

58. The war in Ukraine has caused LNG prices to rise, leading to significant losses for Taiwan Power Company, which imports 100% of its LNG.

59. The company’s losses were so severe that it had no choice but to raise electricity prices, but due to upcoming presidential and legislative elections, residential rates remained largely unchanged.

60. The price hikes were primarily focused on industrial users.

61. Given TSMC’s strong operating profit margins, the company might think it’s just a small price to pay for higher electricity bills.

62. Power outages are also a concern.

63. When the electricity reserve drops below 10%, the likelihood of blackouts increases.

64. With Taiwan’s power reserve now down to 7% due to the shutdown of the last nuclear plant, the risk of blackouts is high.

65. President Lai Ching-te, newly elected, recently formed a National Climate Change Committee, which includes individuals advocating for a reconsideration of the nuclear phase-out.

66. Lai suggests that nuclear energy discussions may only take place after his term ends in 2030.

67. Restarting the nuclear power industry, if discussions do happen, will not be an easy task.

68. Since Taiwan’s nuclear phase-out, universities have closed their nuclear engineering departments, and many professionals have moved abroad, creating a shortage of skilled workers.

69. Taiwan’s decision to phase out nuclear energy was driven by specific concerns.

70. Taiwan, like Japan, is a country prone to severe earthquakes.

71. Starting in 2024, Taiwan has been experiencing more frequent earthquakes.

72. On April 3, 2024, Taiwan experienced its strongest earthquake in 25 years in the Pacific Ocean region.

73. On January 21, 2025, another earthquake of magnitude 6.4 struck in the Pacific, damaging 60,000 TSMC wafers.

74. A 5.6-magnitude earthquake also occurred on January 30, 2025.

75. Given the frequency and scale of these quakes, there is a real possibility of massive earthquakes occurring, not just aftershocks.

76. Taiwan’s position on the earthquake fault line, similar to Japan, explains why it’s hard to easily restart nuclear power despite its energy needs.

77. Taiwan’s electricity shortages are now affecting industries, with new data centers being denied construction permits due to power supply issues.

78. However, the most critical impact is on military security.

79. Taiwan is increasingly relying on LNG imports.

80. LNG is highly volatile, meaning it’s difficult to store for long periods, unlike crude oil.

81. Taiwan’s LNG storage capacity can only sustain 11 days’ worth of supply, meaning a blockade by China for over 11 days would create a severe energy crisis.

Taiwan’s Power Play: High Bills, Energy Gaps, and the Trade War Behind the 20% Tariff

Taiwan’s sky-high electricity rates and severe energy shortages are quickly becoming a serious liability for its industrial edge. Relying heavily on LNG puts Taiwan in a risky position—China’s potential maritime blockade could cut off its power supply at any moment. The government’s big bet on semiconductors and AI is fantastic, but there’s one small problem: they’re running out of power.

If TSMC were a private company, relocating to the U.S. for cheap and abundant energy would be a no-brainer. But as a quasi-state-owned giant, that’s not an option.
So, when Intel demands a 51% stake in a U.S. joint venture, Taiwan’s 20% tariff suddenly makes sense. It’s not just about trade—it’s a power struggle, in more ways than one.