Since the advent of Trump 2.0, there has been a vigorous push for the "Made in America" and reciprocal tariffs policies. Although TSMC has established a U.S. facility, this is merely the beginning of Taiwan's new role. As industrial parks and technological firewalls become the latest battlegrounds, Taiwan must establish a dual strategy of institutionalized cooperation and core technology protection.

Upon taking office in 2025, U.S. President Donald Trump immediately launched "reciprocal tariffs" globally, aggressively promoting the "Made in America" policy to revitalize domestic industries and fulfill his promise to "Make America Great Again." For Taiwan, "Made in America" is no longer a distant slogan. The concrete viability of U.S. manufacturing is being validated by TSMC's 4-nanometer fab in Arizona, which has formally entered the mass production phase.
 

Four Prerequisites for Manufacturing in the U.S.


Not all industries meet the conditions for manufacturing in the United States. Even with strong technology, if a business does not meet the following four factors, it will be challenging to establish a presence in the U.S.:
  1. High Gross Margin: Product gross margins must be high enough to sustain the high-cost environment in the U.S. For example, feasibility exists only if the gross margin for advanced process chips is around 60%, and for industries such as AI servers, robotics, and the biomedical sector, it should be above 30%.
  2. High Degree of Automation: Due to the high cost of labour in the U.S., factories must be highly automated. While Taiwanese manufacturers possess the hardware foundation, they must collaborate with U.S. research institutions and companies to build AI factories.
  3. Industrial Cluster: A comprehensive supply chain cluster must be formed, integrating upstream and downstream players to reduce costs and mitigate geopolitical and tariff risks.
  4. Major Customers in the U.S.: Production in the U.S. is commercially justifiable only if more than half of the revenue comes from the American market.
Therefore, the industries that meet these conditions are primarily Taiwan's semiconductor, high-tech, ICT, and biotech/medical sectors.
 

Two Key Areas for Taiwan under the "Made in America" Banner

1. Establishing Industrial Parks in the U.S. with Taiwanese Experience


On July 23, 2025, the Trump administration released the "AI Action Plan," which outlined three key pillars: relaxing regulations and encouraging innovation, building U.S. AI infrastructure, and promoting AI diplomacy and national security.
The second pillar, "Building AI Infrastructure," is highly relevant to Taiwan. The White House's "Trump Second-Term Investment List," announced on August 15, features AI infrastructure projects as its top five investments, including those from Apple, NVIDIA, Project Stargate, and TSMC's semiconductor investments, totalling over $1 trillion. Almost all these projects are linked to the Taiwanese technology supply chain.
However, a gap remains between federal policy and local implementation. Taiwanese tech giants, such as TSMC, Foxconn, Wistron, Wiwynn, Quanta, and Inventec, have established factories in Arizona and Texas, but they generally face challenges related to water and power supply, environmental reviews, talent acquisition, regulations, taxation, government engagement, and subsidies.
In the era of Trump 2.0, federal control over state governments is unprecedented. If Taiwan is to assist manufacturers in localization and strengthen cooperation within the democratic supply chain, it should actively advocate for a formal U.S. federal-level policy document. This document should center on "Technology Industrial Parks" to complete the localization mechanism. In other words, Taiwan needs to upgrade "Made in Taiwan" to "Made with Taiwan," transforming industrial capabilities into an institutionalized cooperation framework.
 

2. Establishing a Technological Firewall and Protecting Core Technologies


The flip side of investing in the U.S. is how to prevent the "hollowing out" of Taiwanese industry. In the early days, the government mandated that wafer fabs moving to China must utilize technology that was one generation (N–1) behind the latest. Now, with the global competitive landscape changed, the thinking behind the technological firewall must also be upgraded.
Taiwan's technological protection should not only target specific countries but must be Taiwan-centric, establishing an executable and supervisable protection system. In recent years, cases of theft involving Taiwan's 2-nanometer key technology were traced not to China, but to Japan's Tokyo Electron (TEL), indicating diversified risks.
Currently, Taiwan's technological firewall is composed of the Trade Secrets Act and the National Security Act. The Executive Yuan released the "Regulations on the Identification of National Core Key Technologies" on April 26, 2023. The National Science and Technology Council (NSTC) subsequently established the "National Core Key Technology Review Committee," which has identified 32 core technologies to date. However, the standards and details remain opaque, making compliance difficult for government agencies and enterprises, thus failing to form adequate protection or external negotiation leverage.
In the future, a tiered management framework should be established based on the importance of the technology, striking a balance between protection and industrial development flexibility. This will establish a clear and operational system for protecting core technologies, thereby safeguarding Taiwan's economic and national security.
 

Localization in the U.S. While Keeping Roots in Taiwan


2025 marks the inaugural year for "Made in America" and a pivotal year for Taiwan's industrial strategy. On the one hand, Taiwan must assist enterprises with institutionalised development and localisation in the U.S.; on the other hand, it is even more critical to ensure that core technologies remain rooted in Taiwan. This is not just an industrial strategy, but the key to maintaining Taiwan's national competitiveness for the next decade.
 
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