Beyond the Silicon Shield: TSMC, Geopolitical Turbulence, and the Institutional Politics of Global Tech Power

Semiconductors have become central to geopolitical rivalry and national strategy. This article examines Taiwan Semiconductor Manufacturing Company (TSMC) as a paradigmatic case of institutional transformation in strategic industries. More than a technological leader, TSMC has emerged as an institutional mediator—navigating overlapping policy regimes, supply chain fragmentation, and diverging state agendas. Drawing on TSMC’s global expansion, especially its fabs in Arizona and Kumamoto, I show how firms are increasingly expected to perform quasi-sovereign functions: ensuring supply continuity, managing regulatory tensions, and absorbing geopolitical risk. I argue that prevailing discourses of “decoupling” and “reshoring” misdiagnose the problem, treating physical relocation as a proxy for strategic autonomy. Instead, I theorize institutional absorptive capacity as the foundation of long-term sovereignty: the ability of firms and states to learn, adapt, and coordinate across volatile environments. This requires shifting policy focus from industrial control to institutional design—investing in learning systems, governance capacity, and trust-based cooperation. TSMC’s trajectory thus signals a broader reconfiguration of state–firm boundaries and the emergence of a multipolar, narrative-driven political economy. The article concludes by outlining future research on cross-border institutional agency, strategic narrative construction, and techno-industrial governance beyond the U.S.–China binary.