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

Taiwan Semiconductor Manufacturing Co’s foreign investments are demonstrating Taiwan’s prowess in the sector, Tsai told reporters on Tuesday (Dec 27). TSMC, the primary chipmaker for Apple Inc, is building plants 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 work force,” Tsai said. “He meant that we do not have to worry about Taiwan’s chip industry.”

TSMC, which years ago surpassed Intel Corp at the forefront of the technology, is ramping up capacity in Arizona 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 chipmaking technology at home.

China has long claimed the island, just 100 miles 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.

  - Bloomberg