The economics of advanced semiconductor manufacturing in the US differ sharply from those in Taiwan, and TSMC’s experience in Arizona is underscoring how difficult that gap is to bridge. Analysts say higher depreciation per wafer and elevated labor costs are placing sustained pressure on margins at the company’s US fabs, even as production ramps up.

Japan’s Ministry of Defense announced in December 2025 that it had suspended Kawasaki Heavy Industries from bidding on defense contracts until March 11, 2026, a 2.5-month ban following revelations of falsified fuel efficiency data for submarine engines supplied to the Maritime Self-Defense Force.

Taiwan’s power semiconductor suppliers are positioning for steady growth through 2026. The momentum comes from two fronts: artificial intelligence data centers adopting new power architectures and automotive customers adjusting sourcing after supply disruptions linked to Nexperia.

Taiwan is set to dramatically scale up its military drone production starting in 2026 as the Ministry of National Defense prepares to order nearly 50,000 units, a move intended to shift the island’s domestic supply chain from small-batch development to industrial-scale manufacturing. Following the launch of its largest-ever unmanned aerial vehicle tender in 2025, defense authorities are planning for a sharp increase in volume that will test the capability of local manufacturers to sustain mass production.