Taiwan leverages its semiconductor dominance to deepen alliances as the US and EU push for greater chip investment.

Taiwan is leveraging its semiconductor strength to deepen international partnerships as the United States and European Union push for greater investment from the island’s technology companies.

At the SEMICON Taiwan trade show last week, Taiwan presented itself as a reliable and democratic supplier at the heart of the global artificial intelligence revolution, while signalling its willingness to share the benefits of its chip industry with like-minded partners.

Taiwan is home to companies including TSMC, whose advanced chips power AI applications. The diplomatically isolated island has long used its technological capabilities to strengthen international support, while China opposes such efforts and claims Taiwan as part of its territory.

The island is also facing increasing pressure from the United States, its most important international backer and arms supplier, to expand semiconductor manufacturing on American soil.

TSMC is investing $265 billion in manufacturing facilities in Arizona as part of that expansion.

President Lai Ching-te, who unusually addressed two separate events at SEMICON Taiwan on the same day, said Taiwanese companies were expanding internationally to strengthen global supply-chain resilience.

Taiwan’s Economy Minister Kung Ming-hsin, speaking at the opening of the US pavilion, said Taiwanese companies were planning an additional $20 billion in investment in the United States.

Taiwan and Washington reached an agreement earlier this year to increase Taiwanese investment in the US in exchange for reduced export tariffs, although uncertainty remains over the final terms.

US Commerce Secretary Howard Lutnick said last week that semiconductor tariffs would be imposed on companies that do not manufacture chips in the United States.

Bill Frauenhofer, the Commerce Department official overseeing the tariff agreement with Taiwan, nevertheless struck an optimistic tone at SEMICON.

“The phenomenal partnership” between Taiwan and the US was working, he said. “And we really, both of us, have vested interests in terms of making this successful.”

Taiwanese technology companies have acknowledged that expanding manufacturing beyond the island is increasingly necessary.

Young Liu, chairman of Foxconn, Nvidia’s largest AI server manufacturer, said companies now needed to broaden their approach to global manufacturing.

“Think about how to make with Taiwan, not in Taiwan; make with Taiwan in the country where the market is,” he said.

Tien Wu, chief operating officer of ASE, the world’s largest chip packaging and testing company, agreed during the panel discussion.

“Politically it is the right thing,” Wu said. “And honestly, I don’t think we have a choice not to do that.”

Taiwan is also seeking closer economic ties with the European Union, which is pursuing greater investment from Taiwanese semiconductor companies.

The European Commission sent official Kilian Gross to SEMICON to promote the bloc’s proposed Chips Act 2.0 to Taiwanese officials and businesses.

Taiwan has sought closer cooperation with the EU partly because both sides have strongly supported Ukraine in its war with Russia and face trade and diplomatic tensions with China.

Deputy Foreign Minister Francois Wu, one of Taiwan’s most prominent diplomats, said Taiwan and France shared democratic values and a commitment to a rules-based international order while speaking at the opening of the French pavilion.

“We use technology to connect with the world, not to control it,” he added. (AriseNews TV)