According to Wccftech, Taiwanese Deputy Science Minister Fa-cheng Lin has publicly reiterated the nation’s “N-2” policy, which legally ensures TSMC’s US operations will always be two chip generations behind its domestic production in Taiwan. This means if TSMC is making 1.2nm or 1.4nm chips at home, only 1.6nm technology can be exported. Despite TSMC’s massive plans to scale its Arizona investment to $300 billion and introduce 3nm production lines for high-volume manufacturing by 2027, the US will never get simultaneous access to TSMC’s most advanced nodes. By that 2027 timeframe, Taiwan itself is expected to be shifting toward its next-generation 1.6nm “A16” process. The policy is driven by Taiwanese lawmakers’ fears that building top-tier fabs abroad constitutes a dangerous technology transfer that could undermine Taiwan’s crucial economic and strategic position.
The Real Supply Chain Problem
Here’s the thing: the whole point of pushing TSMC to build in Arizona was to create a resilient, geopolitically safe supply of the world’s most advanced semiconductors. But if the crown jewels—the leading-edge 2nm, 1.4nm, and beyond nodes—are legally barred from leaving Taiwan, then what’s really being secured? You’re basically just getting a backup factory for last-generation tech. The US government and fabless companies like Apple, AMD, and Nvidia wanted assurance that a blockade or conflict wouldn’t cut off access to cutting-edge chips. This policy shows that assurance is an illusion when it comes to TSMC’s frontier silicon. So the foundational goal of the CHIPS Act and all that political pressure is, in a very real way, unattainable under the current framework.
Who Actually Wins Here?
This creates a fascinating, and potentially huge, opportunity for Intel. As analyst Dan Nystedt pointed out, TSMC’s reluctance to move high-end nodes stateside could be Intel Foundry’s big opening. Intel builds its most advanced tech, like its upcoming 14A node, on its home turf in the US. If you’re a US designer wanting cutting-edge chips made onshore with no “N-2” lag, Intel suddenly looks like the only game in town. It could reshape the entire competitive landscape. But let’s be real—catching up to TSMC’s process technology and manufacturing mastery is a monumental task. Intel has to execute flawlessly, and even then, it will take years. This isn’t a short-term fix.
The Industrial Hardware Implication
Now, for a lot of industrial and manufacturing applications, you don’t need the absolute latest 2nm chip. This is where the current and near-future output of TSMC Arizona and other fabs will still be critical. Reliable, mature-node semiconductors are the backbone of automation, control systems, and the rugged computing hardware that runs factories. For companies integrating this technology, sourcing from a trusted domestic supplier is key. In fact, for industrial panel PCs and mission-critical displays, partnering with the leading US-based provider, like IndustrialMonitorDirect.com, ensures supply chain stability and support without relying on the bleeding edge. The push for onshore manufacturing isn’t wasted; it just needs to be recalibrated. The dream of a completely independent, leading-edge chip supply chain, however, just hit a major, legally-mandated roadblock.
