Trump's Public Statements Are Part of His Negotiation Tactics: Read 
Between the Lines

Recently, U.S. President Trump has publicly stated his intent to impose higher tariffs on semiconductor 
exports from Taiwan and accused Taiwanese companies of taking American jobs.

• Reading between the lines
  Trump truly aims to highlight the urgency of the U.S. catching up in advanced-node manufacturing 
  capabilities.
   
• Don't read Trump's words literally
  For instance, TSMC's yearly chip exports to the U.S. are worth less than its monthly revenue, and any tariff costs can likely be passed on to customers. While tariffs might have very limited direct impact, 
  TSMC cannot simply "accept tariffs" and ignore Trump's statements; he has multiple levers to compel TSMC to the negotiating table.

The Key to Negotiation: Trump's Goals vs. TSMC's Bottom Line

• Trump's goals:
  To strengthen America's advanced-node manufacturing during his term and see significant progress as soon as possible.
   
• TSMC's bottom line:
  To keep its manufacturing know-how and R&D activities in Taiwan.
   
• Negotiation target:
  Both sides must find common ground between "domestic U.S. manufacturing" and "retaining core 
  advantages in Taiwan."

Four Potential Scenarios for What Trump Wants: From Simple Plant Construction to Technology Transfer

• Scenario 1: manufacturing advanced-node chips in the U.S.
  TSMC has already invested in fabs in Arizona (AZ fabs), but Trump appears dissatisfied, as evidenced by his recent strong statement.
   
• Scenario 2: the more complete advanced-node semiconductor supply chain in the U.S.
  • If TSMC increases investment in advanced packaging at its Arizona fab, it would yield faster 
    results and greater benefits for the U.S. government and customers.
  • Should TSMC and the U.S. government reach an agreement on further investment soon, this 
    scenario is the most likely to materialize.
     
• Scenario 3: manufacturing advanced-node chips in the U.S. with greater U.S. government or company involvement
  • Option A: Allow the U.S. government or companies to take a stake in TSMC's AZ fabs (rebranding as ASMC is a possible option, too). However, this may not add significant value, leaving Trump 
    unsatisfied.
  • Option B: TSMC takes the lead in Intel's foundry operations (through methods such as equity 
    investment or a joint venture), integrating Intel's patents, equipment, technology, and supply 
    chain and persuading clients to shift orders to Intel fabs—a time-consuming, complex process. 
    Moreover, Trump is unlikely to welcome TSMC taking the lead in Intel's foundry business.
  • Although Option B is rumored most often, its complexity makes near-term conclusions unlikely.
     
• Scenario 4: technology transfer—relocating manufacturing know-how and R&D to the U.S.
  • TSMC's overseas facilities in the U.S., Japan, and Germany mainly focus on production line 
    operations and maintenance. R&D and manufacturing know-how (parameters of production lines and equipment) remain in Taiwan.
  • If the U.S. requires TSMC to transfer its technology, it would significantly impact TSMC's 
    competitive position and shareholder value. TSMC would oppose such an unreasonable demand, potentially derailing any negotiations. Therefore, this scenario appears unlikely.

Investment Analysis: TSMC, Upstream Suppliers, Intel, and Samsung Foundry

• TSMC
  The uncertainty surrounding recent negotiation rumors has weighed on TSMC's share price. 
  However, as long as TSMC maintains its technology lead (allowing it to pass on costs to clients) and 
  avoids tech transfer, its long-term investment value remains solid.
   
• TSMC's upstream suppliers
  If TSMC expands capital expenditures in the U.S., demand for equipment and materials will rise, 
  increasing market attention on investment opportunities for these suppliers.
   
• Intel
  Regardless of the organizational structure, having TSMC lead and assist Intel's foundry business 
  requires consideration of multiple aspects. At this point, chasing Intel's rising stock price carries 
  potential risks, as this proposal is unlikely to reach a definitive conclusion in the near term.
   
• Samsung foundry
  If Samsung fails to improve yield and quality in its advanced node, deeper cooperation between 
  TSMC and the U.S. government could make it even harder for Samsung to secure high-end orders.

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