US-Taiwan Strategic AI Partnership and Semiconductor Supply Chain Restructuring: In-Depth Analysis of Investment Implications

Now let me prepare a systematic and professional analysis report for you based on the comprehensive collected data:

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On January 15, 2026, the U.S. Department of Commerce announced the signing of a landmark trade and investment agreement with Taiwan, marking the most profound structural transformation of the global semiconductor supply chain landscape since the 1980s [1][2]. Built on the successful implementation of the U.S. CHIPS and Science Act (CHIPS Act), this agreement further strengthens U.S. strategic autonomy in advanced semiconductor manufacturing.

According to the official statement released by the U.S. Department of Commerce, the core investment commitments of the agreement cover three pillars: First, Taiwanese semiconductor and technology companies will make direct investments in the U.S. totaling

to build and expand production and innovation capacity for advanced semiconductors, energy, and artificial intelligence [1]. Second, the Taiwanese government will provide to support Taiwanese enterprises in establishing a complete semiconductor supply chain ecosystem in the U.S. [1]. Third, the two parties plan to build a world-class industrial park in the U.S., positioning the U.S. as a global hub for next-generation technologies, advanced manufacturing, and innovation [2].

The agreement also establishes a predictable tariff framework. Under the terms, the

[1]. This arrangement holds significant strategic value for Taiwanese semiconductor companies: it ensures access to the U.S. market while providing clear policy expectations, reducing uncertainty in investment decisions.

As a direct outcome of the agreement, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest wafer foundry, plans to significantly increase its total investment in Arizona from the previously announced

[3][4]. This investment will expand TSMC’s U.S. capacity from the originally planned 6 fabs to approximately , plus 2 advanced packaging plants and 1 R&D center [4]. Notably, TSMC broke ground on its third Arizona fab in April 2025, which will adopt N2 and A16 process technologies and is expected to enter mass production by the end of the decade [4].

The signing of the US-Taiwan agreement marks a paradigm shift in the semiconductor industry’s investment logic. According to a Q4 2025 KPMG survey of 151 semiconductor industry executives,

, while [5]. This trend will accelerate further following the agreement’s signing.

From an investment theme perspective, four key dimensions are undergoing significant changes:

: Rising from an importance score of 9.0 to 9.5, it remains the highest priority. The continuous expansion of AI infrastructure is the core driver of demand for advanced process chips, with AI chips projected to grow by over 30% in 2025 [6].

: Jumping from 5.5 to 8.0. The US-Taiwan agreement effectively reduces supply chain concentration risk by building complete advanced process capacity in the U.S., providing a basis for investors to re-evaluate industry risk premiums.

: Rising from 4.0 to 6.5. While the agreement reduces direct conflict risks, investors must still monitor the long-term evolution of the Taiwan Strait situation and incorporate it into tail risk considerations in valuation models.

: Increasing from 7.0 to 8.5. The large-scale investment driven by the agreement will convert into long-term growth momentum, particularly in U.S.-based advanced packaging and manufacturing capabilities.

As the absolute leader in advanced process technology (holding approximately 63% of the wafer foundry market share), TSMC is in the most advantageous position under the agreement framework [7]. From a financial perspective, TSMC’s 2024 free cash flow reached $8701.7 billion, with a net profit margin of 43.7% and ROE of 34.52% [8]. DCF valuation analysis shows that intrinsic value under conservative assumptions is $1806.68, representing 428.8% upside from the current share price of $341.64; even under neutral assumptions, valuation reaches $2022.49, with 492.0% upside [9].

TSMC’s investment logic is shifting from a “pure growth” model to a dual-driven model of “growth + strategic value”. Its Arizona capacity expansion not only enables access to U.S. government subsidies (CHIPS Act funds) but also brings it closer to major North American customers (NVIDIA, AMD, Apple, etc.), shortening product delivery cycles and reducing logistics costs [4].

As the absolute leader in AI chip design, the core of NVIDIA’s investment logic is ensuring stable supply of advanced process capacity. TSMC’s U.S.-based capacity expansion provides NVIDIA with a more reliable supply chain option, reducing vulnerability from sole dependence on Taiwanese production [6]. Industry analysis suggests NVIDIA may further strengthen vertical supply chain integration through acquisitions of photonics platform companies such as POET to maintain long-term leadership in AI infrastructure [6].

Intel is in a critical transformation period, and its IDM 2.0 strategy positions it as both a potential competitor and customer of TSMC. According to the latest analysis, Intel’s 18A process node introduces two breakthrough technologies: the RibbonFET Gate-All-Around transistor architecture and PowerVia backside power delivery technology, giving it its first technological lead in power delivery in a decade [10]. However, Intel’s foundry business still faces fierce competition from TSMC and Samsung, with negative free cash flow (-$15.66 billion) and a moderate debt risk rating [11].

For Intel, the US-Taiwan agreement brings both opportunities and challenges. On one hand, growing U.S.-based foundry demand may bring more orders; on the other, TSMC’s accelerated U.S. expansion will further squeeze its market space.

The US-Taiwan agreement will further accelerate regional restructuring of the global semiconductor supply chain. According to industry analysis, this restructuring will unfold along three main paths [7]:

: Advanced process capacity is shifting from Taiwan and South Korea to the U.S., Europe, and Japan. The U.S. aims to triple domestic leading process chip capacity by 2030 [12]. TSMC’s Arizona expansion is the core driver of this trend.

: ATP capacity is dispersing to Southeast Asia, Latin America, and Eastern Europe to reduce single-region dependence [7]. TSMC’s planned Arizona advanced packaging plant will significantly enhance U.S.-based packaging capabilities.

: Equipment and material suppliers are expanding capacity simultaneously in the U.S., Europe, and Asia to support the global fab construction wave [12].

Supply chain diversification requires balancing security and cost efficiency. The KPMG survey shows that while 93% of semiconductor executives expect 2026 revenue growth, supply chain risks have replaced talent shortages as the industry’s top concern [5].

: U.S.-based manufacturing costs are significantly higher than in Asia. For TSMC’s Arizona fab, unit capacity investment intensity is far higher than in Taiwan. However, U.S. CHIPS Act subsidies (60% to be allocated by 2026) and the predictable tariff framework partially offset this cost disadvantage [12].

: Shortened supply chains are expected to reduce chip delivery cycles by 30%, significantly improving supply chain responsiveness [12]. This advantage is particularly critical for fast-iteration scenarios such as AI data centers.

: Supply chain diversification will drive enterprises to shift from “Just-in-Time” (JIT) to “Just-in-Case” (JIC) inventory models to mitigate supply disruptions from geopolitical risks [6].

Industry research shows significant variation in impact across supply chain segments:

: Most affected, with expected 35% shorter delivery cycles and 30-point improvement in supply chain security (out of 100). TSMC’s planned Arizona advanced packaging plant will significantly boost U.S.-based packaging capabilities [4].

: Expected 10% cost reduction and 30% shorter delivery cycles. Material suppliers are expanding U.S. and European capacity to meet local manufacturing demand.

: Expected 8% cost reduction and 20% shorter delivery cycles. Equipment suppliers such as ASML will benefit from the global fab expansion wave, especially the upcoming DRAM super cycle [13].

: Relatively less affected, with 3% cost reduction and 15% shorter delivery cycles. This segment has high concentration (dominated by U.S. companies), so diversification demand is low.

: Expected 5% cost reduction and 25% shorter delivery cycles. While U.S.-based manufacturing costs are higher, its strategic value is rising.

The US-Taiwan agreement has significantly altered the semiconductor industry’s geopolitical risk exposure. Industry analysis shows a potential Taiwan Strait conflict could cause over

, with a one-year blockade scenario leading to up to —approximately 5% of global GDP [6]. The agreement reduces vulnerability to sole Taiwanese supply by building U.S.-based advanced process capacity.

However, investors must still monitor the following risks:

: Actual implementation of agreement terms may face political and economic uncertainties. TSMC’s Arizona construction has already encountered cost overruns and construction delays [4].

: The transfer of advanced process technology to the U.S. may trigger concerns in Taiwan about industrial “hollowing out”, requiring a balance between local strategic value and global cooperation [4].

: The agreement may prompt Chinese countermeasures, including trade restrictions, technology blockades, or heightened geopolitical tensions.

Based on the above risk assessment, the following strategies are recommended for investors:

: Hold direct beneficiaries such as TSMC as core positions (60-70%), with diversified beneficiaries (equipment, packaging, etc.) as satellite positions (20-30%).

: Consider allocating assets negatively correlated with geopolitical risks (e.g., gold, government bonds) or using option strategies to hedge tail risks.

: Adjust allocation ratios dynamically based on Taiwan Strait developments and agreement implementation progress.

The US-Taiwan agreement will further reshape the global wafer foundry landscape:

: Consolidates technological leadership, planning 1.4nm mass production in 2027 and 2nm mass production in 2025 [4]. U.S. capacity expansion is transforming TSMC from “Taiwan-led, global service” to “dual-core (Taiwan + U.S.), regional service”.

: Actively challenging TSMC’s leadership, planning 2nm mass production in 2025 and 1.4nm mass production in 2027 [14]. Samsung’s Taylor, Texas fab has received CHIPS Act funding, making it a key U.S.-based advanced process competitor.

: Redefines its technology roadmap with the 18A process, but its foundry business is still in the build-out phase [10]. Intel is transitioning from “vertical integration” to a dual-track model of “foundry + design”.

The AI chip market’s competitive landscape is also undergoing profound changes:

: Maintains approximately 80% market share in AI training via its CUDA ecosystem and dominance in CoWoS advanced packaging. NVIDIA is consolidating supply chain control through vertical integration (e.g., potential POET acquisition) [6].

: Catching up with NVIDIA via products such as the MI400 series, but remains highly dependent on TSMC’s capacity and technology roadmap [15]. The ramp-up progress of AMD’s 2nm capacity will directly impact its competitive position.

: Collaborating with NVIDIA on manufacturing certain components while positioning its Gaudi 3 accelerator as a cost-effective AI inference solution [10].

Based on the above analysis, investment ratings for semiconductor sub-segments are as follows:

Segment	Investment Rating	Rationale
Wafer Foundry (TSMC)	Strong Buy	AI demand growth + U.S. capacity expansion + enhanced pricing power
AI Chip Design (NVDA)	Buy	Beneficiary of AI infrastructure expansion, strengthened supply chain security
Semiconductor Equipment (ASML, LAM, etc.)	Buy	Direct beneficiary of global capacity expansion
Assembly, Testing & Packaging	Buy	Growing advanced packaging demand + U.S. localization trend
Memory Chips	Buy	HBM super cycle + structural AI demand growth
Intel (INTC)	Hold	Transformation efficacy unproven, intense foundry competition pressure

TSMC is the most direct and critical beneficiary of the US-Taiwan agreement. Its investment value is analyzed across multiple dimensions:

: DCF valuation shows intrinsic value of $2022.49 under neutral assumptions, representing 492.0% upside from the current $341.64 share price [9]. Even accounting for implementation uncertainties, current valuation offers a significant margin of safety.

: TSMC maintains global leadership in 5nm, 3nm, 2nm, and upcoming 1.6nm processes, with its CoWoS advanced packaging technology critical for AI chips [7].

: Global top chip design firms (Apple, NVIDIA, AMD, Qualcomm, etc.) rely heavily on TSMC’s advanced processes, forming a strong ecological barrier.

: TSMC projects AI chip demand to grow at a 40%+ CAGR, with further wafer price increases in 2026; the new 2nm process is expected to cost 50% more than 3nm [16].

Expanding U.S.-based advanced packaging capacity creates significant investment opportunities. TSMC’s Arizona advanced packaging plant will reduce reliance on Taiwanese packaging capacity while creating local jobs.

The U.S. and Europe are increasing investments in semiconductor equipment localization. Suppliers such as Applied Materials (AMAT) and Lam Research (LAM) will benefit from global fab expansion, especially the upcoming DRAM super cycle [13].

Semiconductor material suppliers are expanding global capacity to support diversified supply chains. Firms such as Shin-Etsu Chemical and GlobalWafers will benefit from this trend.

:

1. Macroeconomic Risk
   : Rising interest rates and economic recession may suppress AI infrastructure investment and chip demand.
2. Geopolitical Risk
   : Escalating Taiwan Strait tensions could severely disrupt supply chains.
3. Execution Risk
   : TSMC’s U.S. capacity expansion may face cost overruns, delays, and technical challenges.
4. Competitive Risk
   : Catching up by Samsung and Intel may squeeze TSMC’s market share and pricing power.

:

1. Phased Position Building
   : Avoid single-batch overweighting; use phased position building to reduce timing risk.
2. Hedging Protection
   : Consider option strategies to hedge tail risks.
3. Dynamic Adjustment
   : Adjust allocation ratios dynamically based on industry trends and valuation changes.

The $500 billion semiconductor agreement under the US-Taiwan strategic AI partnership is the most significant structural change in the global semiconductor supply chain since the 1980s. This agreement will not only reshape the geographic map of global semiconductor manufacturing but also profoundly alter the industry’s investment logic and valuation framework.

:

1. TSMC is the Largest Beneficiary
   : As the absolute leader in advanced processes, TSMC will capture strategic value premiums through U.S. capacity expansion. Its current $341.64 share price trades at a significant discount to intrinsic value, offering long-term investment potential.

2. Supply Chain Security Becomes a Core Investment Theme
   : 54% of semiconductor executives are focusing on geographic diversification, marking the industry’s strategic shift from efficiency priority to security priority.

3. Geopolitical Risk Discount Will Gradually Narrow
   : U.S.-based advanced process capacity reduces supply chain vulnerability, providing a basis for investors to re-evaluate risk premiums.

4. Equipment, Packaging, and Materials Segments Will Synchronously Benefit
   : The global fab expansion wave will benefit the entire semiconductor supply chain, offering diversified allocation options for investors.

Looking ahead, as the agreement is implemented and capacity is gradually released, the semiconductor industry will enter a new era of “regionalization + diversification”. Investors need to re-examine traditional investment frameworks, incorporating geopolitical risks, supply chain security premiums, and regional capacity layout into core considerations. For investors who can accurately grasp this structural transformation, the current market adjustment may provide rare long-term allocation opportunities.

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[1] U.S. Department of Commerce. “Fact Sheet: Restoring American Semiconductor Manufacturing Leadership.” January 15, 2026. https://www.commerce.gov/news/fact-sheets/2026/01/fact-sheet-restoring-american-semiconductor-manufacturing-leadership

[2] CommonWealth Magazine. “U.S.–Taiwan Seal $500B Semiconductor Pact to Reshore Chips and Secure Supply Chains.” January 16, 2026. https://english.cw.com.tw/article/article.action?id=4563

[3] Proactive Investors. “Taiwanese chipmakers to invest $250B in US under new trade agreement.” January 15, 2026. https://www.proactiveinvestors.com/companies/news/1085726/taiwanese-chipmakers-to-invest-250b-in-us-under-new-trade-agreement-1085726.html

[4] EE News Europe. “TSMC Arizona investment set to jump to $465bn under proposed US-Taiwan trade deal.” January 2026. https://www.eenewseurope.com/en/tsmc-arizona-investment-465bn/

[5] Manufacturing Dive. “Semiconductor industry most concerned by tariffs, trade policy: KPMG survey.” January 2026. https://www.manufacturingdive.com/news/kpmg-survey-semiconductor-manufacturing-industry-tariffs-trade-policy/807999/

[6] Eurasia Group via LinkedIn. “Tech Sector Alert: 2026 Top Risks and Geopolitical Implications.” January 2026. https://www.linkedin.com/posts/efish1_eurasia-group-the-top-risks-of-2026-activity-7414036069630849024-CVYH

[7] FinancialContent. “Taiwan Rejects US Semiconductor Split, Solidifying ‘Silicon Shield’ Amidst Global Supply Chain Reshuffle.” October 2025. https://markets.financialcontent.com/stocks