NextFin News - In December 2025, a significant pivot is underway in the semiconductor industry, driven by Taiwan’s stringent technology export controls. U.S. tech firms AMD and Google are actively pursuing foundry partnerships with Samsung Electronics at its Taylor, Texas manufacturing facility for the production of 2-nanometer (2nm) chips. This development follows Taiwan’s enforcement of the so-called "N-2" export rule, which restricts Taiwan Semiconductor Manufacturing Company (TSMC) from applying its most advanced manufacturing nodes at its overseas fabs, including those in the United States.
The catalyst behind this decision revolves around Taiwan’s National Core Strategic Technology List. Overseen by Taiwan’s Ministry of Economy and the National Science and Technology Council, this policy mandates that any chipmaking technology supplied outside Taiwan must be at least two technological generations behind the leading nodes produced domestically. For TSMC, which successfully ramped up its 2nm Gate-All-Around (GAA) transistor process in Hsinchu and Kaohsiung in late 2025, this inhibits deployment of similar cutting-edge technology at its Arizona fabs until approximately 2028.
Samsung’s Taylor plant, backed by a substantial $17 billion investment, stands poised to be the only U.S.-based fabrication facility capable of mass-producing 2nm chips as early as mid-2026. Executive Chairman Lee Jae-yong’s recent meetings in the U.S. with AMD CEO Lisa Su and Tesla CEO Elon Musk underscore Samsung’s strategic push to capture domestic advanced semiconductor orders. Moreover, Google’s Tensor Processing Unit (TPU) team has audited the Taylor facility for collaborations, signaling a growing confidence in Samsung’s U.S. operations amid geopolitical constraints.
This turning point can be analytically attributed to several intersecting factors. First, the Taiwan “N-2” rule, designed to fortify Taiwan’s "Silicon Shield" by curbing intellectual property leakage, creates a multi-year technological lag for American firms reliant on TSMC’s overseas fabs. This lag materially impacts U.S. companies pursuing leadership in power-efficient, high-density 2nm-class chips essential for AI workloads and data center acceleration.
Second, the geopolitical imperatives of U.S. semiconductor sovereignty, accentuated by U.S. President Trump’s administration's policies promoting onshore chip fabrications under the CHIPS and Science Act, intensify pressure on manufacturers to localize production. Samsung and Intel have capitalized on this opportunity by accelerating deployment of leading-edge nodes within the country, circumventing Taiwan-specific export restrictions.
Third, the pragmatic imperatives for U.S. companies like AMD and Google are compelling. AMD is reported to be adopting a “dual-foundry” strategy, actively negotiating with Samsung to use its Texas plant for next-generation EPYC server CPU chips. Google’s involvement seeks to secure reliable TPU production capacity for its AI infrastructure, providing flexibility beyond TSMC’s Taiwan-only 2nm limitations.
Financially and operationally, Samsung’s Texas foundry presents attractive advantages. The facility benefits from mature GAA process technology honed through prior 3nm production, promising competitive transistor performance and yield rates. This targeted capability aligns well with the urgent demand for AI-optimized semiconductors, projected to command a significant share of the global $100+ billion advanced logic foundry market by 2030.
Looking forward, this realignment portends pronounced industry and geopolitical shifts. The bifurcation in chip production locations — with TSMC constrained to advanced fabs in Taiwan, and Samsung (together with Intel) leading edge in the U.S. — risks fragmenting the semiconductor supply chain. This fragmentation may introduce differentiation in hardware capabilities based not solely on design but significantly on geographic and regulatory origins, potentially impacting AI competitiveness and national security considerations.
Moreover, these developments underscore a broader, systemic trend: the rise of geopolitical sovereignty as a primary factor influencing semiconductor investment, deployment, and client alliances. As Taiwan continues to enforce restrictive export policies, and the U.S. government emphasizes strategic domestic capacity, expect intensified capital flows towards U.S.-based fabs. Samsung’s Taylor plant is likely to catalyze further deals with U.S. tech conglomerates seeking both cutting-edge technology and supply chain assurance.
The implications extend beyond technology alone to affect international trade dynamics, supply resilience, and the innovation race in AI hardware architectures. Critical to watch will be Samsung’s ability to consistently deliver yields and scalability comparable to TSMC’s renowned manufacturing precision. Failures or delays could reopen market opportunities for TSMC or Intel, while success could reposition Samsung as the principal domestic foundry for America’s AI chip ambitions.
In sum, Taiwan’s export controls, combined with the policy ambitions of the U.S. administration under U.S. President Trump, have reshaped semiconductor manufacturing strategies by accelerating Samsung’s rise in Texas. This signals a new paradigm where technological leadership is inseparable from geopolitical strategy — a defining feature shaping the future trajectory of AI-capable silicon production worldwide.
Explore more exclusive insights at nextfin.ai.
