China Accuses Taiwan of Handing Over Chip Industry to U.S. for Political Gains

China has accused Taiwan of “giving away” its semiconductor industry to the U.S. for political support. Reports suggest TSMC is in talks for a stake in Intel, though no confirmation has been made. Beijing claims Taiwan’s government is using the chip sector for foreign alliances. The U.S. remains Taiwan’s key partner despite not recognizing its government. Washington seeks to boost domestic semiconductor production with Taiwan’s help. Rising U.S.-Taiwan cooperation in tech and defense continues to heighten tensions with China.

China Accuses Taiwan of Handing Over Chip Industry to U.S. for Political Gains

hina has accused Taiwan of attempting to “give away” its semiconductor industry to the United States as a political gesture to secure support from Washington.

According to U.S. media reports, Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW), the world’s leading contract chipmaker and a key supplier for tech giants like Apple (AAPL.O) and Nvidia (NVDA.O), has been engaged in discussions about acquiring a stake in Intel (INTC.O). However, neither TSMC nor Intel has confirmed these reports, and Taiwan’s government has stated that it has not received any overseas investment applications from TSMC.

Former U.S. President Donald Trump has previously criticized Taiwan for drawing semiconductor manufacturing away from the United States, expressing a desire for more chip production to take place domestically.

At a press briefing, Zhu Fenglian, spokesperson for China’s Taiwan Affairs Office, alleged—without presenting evidence—that there are growing concerns in Taiwan that TSMC could become the “United States Semiconductor Manufacturing Co.” She claimed that Taiwan’s ruling Democratic Progressive Party (DPP) was using the semiconductor industry as leverage to deepen its reliance on the U.S. and further its political objectives.

“In pursuit of its own interests, the DPP authorities have willingly engaged with foreign powers, using Taiwan’s semiconductor sector and leading firms to establish dependence on external forces for political gain—even going so far as to offer them as diplomatic tokens,” Zhu said.

China considers Taiwan part of its territory, despite the strong opposition from Taipei, but has no authority over Taiwan’s foreign investment decisions. Zhu further accused Taiwan’s government of “betraying” its domestic companies for U.S. support, labeling the move as “shameless.”

Taiwan’s Mainland Affairs Council and TSMC have yet to respond to requests for comment.

The United States remains Taiwan’s most significant international partner and arms provider, though it does not officially recognize the island’s government. Washington has long supported Taiwan through military aid, diplomatic engagement, and economic cooperation, despite maintaining formal diplomatic ties with Beijing under the “One China” policy.

In recent years, the U.S. has strengthened its economic and technological partnerships with Taiwan, particularly in the semiconductor industry, which is vital to global supply chains. The CHIPS and Science Act, signed into law in 2022, aims to boost domestic semiconductor manufacturing in the U.S. and reduce reliance on foreign production, with Taiwan playing a key role in this strategy.

TSMC, which produces some of the most advanced chips in the world, has expanded its footprint in the U.S., investing in manufacturing plants in Arizona. However, these developments have sparked debate in Taiwan over the potential risks of shifting critical technology abroad.

China, which considers Taiwan a breakaway province, has repeatedly condemned any collaboration between Taiwan and the U.S., viewing it as a threat to its sovereignty. Tensions over Taiwan’s semiconductor dominance continue to shape geopolitical dynamics, with Beijing closely monitoring Washington’s increasing engagement with Taipei in both the technology and defense sectors.

As the semiconductor industry plays a crucial role in national security and economic competitiveness, both the U.S. and China are vying for greater control over chip supply chains. Beijing has increased pressure on Taiwan through military drills and economic measures, while Washington continues to strengthen trade ties and technological collaboration with Taipei, further escalating regional tensions.