When Apple quietly shifted a portion of its chip orders to Intel, the move was widely read as a sign of trouble for TSMC. Shih Jun-ji(施俊吉) sees it differently — as evidence that the global semiconductor industry has entered a new and more complex era, one governed less by engineering benchmarks than by geopolitical risk pricing.
Shih, a former deputy premier of Taiwan with a doctorate in economics and past experience as chairman of the Taiwan Stock Exchange, sat down with Storm Media for an exclusive interview on what he calls the real competitive dynamics reshaping the chip world. His central argument is surprising: the greatest long-term threat to TSMC's dominance isn't Intel, and it isn't Samsung. It's TSMC itself.
"The real question," he said, "is how today's TSMC competes with tomorrow's TSMC."
Taiwan Chips as a Financial Instrument With Built-In Risk
Shih's analysis begins by reframing what a Taiwan-made advanced chip actually is, from a financial perspective. In his view, customers who source chips from Taiwan are no longer simply buying a manufactured component — they are accepting exposure to geopolitical uncertainty as part of the transaction.
He describes this as a "chip lottery." Peace in the Taiwan Strait means access to the world's most advanced, competitively priced semiconductors. Conflict, however, would mean supply chains severed overnight, with no fallback.
To explain how markets price that kind of risk, Shih draws on oil. Persian Gulf crude is inexpensive to extract and remains globally competitive in price, yet chronic instability in the region forces long-term buyers to absorb supply-disruption risk. West Texas Intermediate and Brent crude cost more — but their premium reflects a safety guarantee: reliable delivery regardless of what happens in volatile corners of the world. Buyers, Shih notes, willingly pay that premium as compensation for geopolitical insulation.
Taiwan's advanced chips, he argues, now carry the identical structure. The price advantage they offer is real, but it is inseparable from the political risk embedded in their origin.
Why Apple Chose Intel, and Why the Math Actually Works
Viewed through this lens, Apple's decision to place orders with Intel — despite its widely acknowledged technology lag, higher manufacturing costs, and inconsistent yields — stops looking irrational. Shih reads it as a deliberate hedge.
Sourcing chips produced on American soil, even at a premium and with technical trade-offs, provides Apple with a form of insurance. In a scenario of severe cross-strait disruption, a company with domestic supply secured would not face an existential threat to its core profitability. That guarantee, Shih argues, has measurable economic value — one Apple has clearly decided is worth paying for.
When TSMC Competes Against Itself
TSMC's ongoing expansion into the United States — carried out largely in response to pressure from Washington — has created what Shih identifies as a structurally unprecedented problem: a company increasingly in competition with its own facilities.
He calls this the dual-track pricing dilemma. Because American fabs carry higher operating costs and offer customers an inherent geopolitical hedge, the chips they produce will always command a price premium over Taiwan-origin output. When cross-strait tensions climb, that premium grows more attractive to risk-averse buyers, drawing demand toward the U.S. plants. When the situation stabilizes, Taiwan's cost advantage reasserts itself and the calculus reverses.
The internal tension this dynamic creates is not trivial. TSMC's Taiwan operations — "today's TSMC," in Shih's framing — must continuously justify their value proposition against the company's own globally distributed facilities — "tomorrow's TSMC." If Taiwan's fabs were to carry geopolitical risk while simultaneously losing their technological edge, he warns, their ability to command premium pricing would collapse entirely.
His conclusion is unambiguous: maintaining an unconditional, full-generation technology lead over every overseas TSMC facility is not a competitive aspiration. It is a survival requirement.
The Intel Factor: Lineage, Trust, and the Limits of Samsung
Shih addresses directly why American technology companies have gravitated toward Intel as their preferred second-source supplier, rather than Samsung, whose foundry capabilities are technically superior.
The answer, he says, comes down to lineage and trust — and Samsung falls short on both counts.
As a South Korean company, Samsung carries its own geopolitical vulnerability, with the persistent security threat from North Korea introducing a degree of risk that mirrors, in different form, the concerns buyers have about Taiwan. But the more consequential problem is commercial: Samsung competes directly with Apple and other American firms in the consumer electronics market, and past disputes over alleged technology appropriation have left deep credibility damage. That history, Shih argues, makes Samsung a difficult candidate for the deep supply-chain partnership that second-sourcing requires.
Intel, by contrast, is the only domestically manufactured option available to American companies. Even as it navigates what Shih describes as a rupture in engineering continuity — a difficult and uneven technological transition — its political risk profile is effectively zero from a Washington perspective. That status, he argues, allows Intel to capture a meaningful share of the risk-premium advantage in competition with TSMC, even without matching its technical capabilities.
Taiwan's Strategic Playbook: Two Levers, One Trump Card
For Taiwan, Shih offers two strategic prescriptions to manage the dual pressures of capacity migration and rising geopolitical competition.
The first is technological discipline. Taiwan's domestic fabs must hold an absolute, non-negotiable one-generation lead over every overseas TSMC facility — permanently. The technology dividend this creates is Taiwan's primary instrument for counterbalancing geopolitical risk in global pricing competition. Surrender that lead, and the game is lost.
The second is institutional leverage of a more assertive kind. Shih proposes that Taipei should consider, under extreme circumstances, imposing an export tax on advanced-node chips. The logic is deliberate: by making Taiwan-origin chip supply more expensive for the American technology giants that depend on it, the government would effectively redirect geopolitical pressure back toward companies with the scale, lobbying power, and commercial self-interest to push Washington toward stronger security commitments to Taiwan.
A Fragile Equilibrium Taiwan Cannot Afford to Squander
Shih closes with a broader strategic observation. TSMC's current concentration of production in Taiwan is not merely a business arrangement. It constitutes, he argues, a form of strategic equilibrium among the United States, China, and Taiwan.
For Beijing, TSMC's presence on the island represents leverage over American supply chains — a source of deterrent value that constrains how far Washington can push. For Washington, Taiwan's security is inseparable from guaranteeing chip supply, giving it a concrete material interest in the island's stability.
That equilibrium is fragile, and directional. Should TSMC's technological capabilities be hollowed out and its production fully relocated to American soil, Taiwan's strategic value would diminish sharply — reducing the leverage that currently shapes how both great powers approach the island's future.
The lesson Shih draws is unambiguous: Taiwan should not treat TSMC as a bargaining chip to be offered in exchange for short-term political assurances. It is a trump card — one whose value depends entirely on continuous technological renewal, and on ensuring that tomorrow's TSMC continues to be built on Taiwanese soil.
