Chip race tensions fuel ahead of Trump’s taking office

The chip race tensions between China, the US, and Taiwan have been fueling in the recent years, and after President-elect Donald Trump's win last week, estimates are on the rise that the US will attain a dominant position in the chip market.

According to recent reports, Taiwan Semiconductor Manufacturing Company (TSMC) allegedly found one of its chips in an artificial intelligence (AI) offering of the Chinese tech firm Huawei, which further fueled tensions as Huawei is on the US restricted list.

The US Department of Commerce ordered the TSMC to cease shipments of high-technology chips to China on Saturday.

The TSMC announced that it would suspend 7-nanometer or smaller chip sales to Chinese chip design firms starting on Monday, according to a report by the Chinese site Ijiwei, while the South China Morning Post (SCMP) reported that Huawei said it is not producing chips via the TSMC after the restrictions.

Taiwan is estimated to produce the most chips in the world with a 68% market share in chip production in 2023, according to data from the Visual Capitalist website, and the country's production capacity is estimated to drop to 60% in 2027 due to the US advances to bring chipmaking home.

Meanwhile, the US is estimated to make a big leap in chipmaking in 2027 with an increase in production from 12% to 17%, derived from the CHIPS and Science Act of 2022, as well as President-elect Trump's potential future moves towards increasing domestic chip production.

Taiwan's largest customers include the US tech giants Nvidia and Apple.

Meanwhile, South Korea stands at 12% in chip manufacturing rate, followed by China with 8%.