Chamath Palihapitiya, the venture capitalist and former Facebook executive, is making a bold claim: Taiwan’s stranglehold on the world’s most advanced chip manufacturing could be irrelevant within 18 months. The reason, he argues, is that the US is getting close enough to producing comparable chips domestically that Taiwan’s status as the single critical chokepoint in the global semiconductor supply chain is about to change.
TSMC, Taiwan’s crown jewel chipmaker, controls over 90% of global production at advanced logic nodes of 7 nanometers and below.
The case Chamath is making
Palihapitiya’s argument rests on a straightforward premise. The US and allied nations are building out semiconductor fabrication capacity at a pace that will, in his view, erode Taiwan’s unique leverage. He suggests the US is nearing the ability to manufacture chips that rival what TSMC currently produces on the island, which would fundamentally alter the strategic math that has made Taiwan one of the most geopolitically sensitive places on Earth.
What the ground reality looks like
The US CHIPS and Science Act has allocated more than $52 billion for domestic semiconductor manufacturing and research. TSMC itself is investing in multiple fabrication facilities in Arizona, with mass production of advanced chips planned for the 2026 to 2028 timeframe. Intel, Samsung, and others are also building or expanding US-based fabs.
The 18-month timeline Palihapitiya cites is aggressive. Most industry roadmaps point to meaningful domestic production capacity coming online in 2026 at the earliest, with full-scale advanced manufacturing more likely by 2027 or 2028.
What this means for investors
For TSMC itself, the calculus is more nuanced. The company is essentially hedging its own geographic risk by building in the US, Japan, and Germany. Investors watching this space should track fab construction timelines and yield rates at new facilities as the real leading indicators.
Be the first to comment