Taiwanese President Tsai Ing-wen said moves by the island’s most valuable chip maker to build factories overseas is a sign of its power abroad and not a threat to the local industry.

TSMC’s foreign investments are demonstrating Taiwan’s prowess in the sector, Tsai told reporters on Tuesday. TSMC, the primary chip maker for Apple, is building plants in Japan and the US.

Taiwan’s dominance of the US$550-billion chip arena has become a source of concern to global policymakers leery of relying on an island Beijing regards as a province and has threatened to invade someday. Yet governments from Berlin to Tokyo and Washington have also aggressively courted investment from the island’s companies, most notably TSMC.

“TSMC founder Morris Chang has repeatedly said Taiwan remains the best place for TSMC to invest in as Taiwan has a comprehensive ecosystem and a superior workforce,” Tsai said. “He meant that we do not have to worry about Taiwan’s chip industry.”

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TSMC, which years ago surpassed Intel at the forefront of the chip-making technology, is ramping up capacity in in the US and Japan while exploring future sites in countries such as Germany. In response, Taiwan’s officials have this year proclaimed that the island’s firms will continue to keep the most advanced chip-making technology at home.

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China has long claimed the island, just 160km off its coast, as a renegade province and threatened to invade to prevent its independence. Recent military exercises have reignited concerns about the world’s dependence on Taiwan for chips. — Debby Wu, with Philip Glamann, (c) 2022 Bloomberg LP