Taiwan flexes chip diplomacy muscles as it faces pressure to share AI wealth with allies

Taiwan showcased its technological prowess at SEMICON, emphasizing its role as a trusted supplier to the AI industry. TSMC, a major chip-maker, supplies chips to many AI applications. Despite diplomatic isolation, Taiwan continues to leverage its tech prowess to garner international support. The US, Taiwan's most important ally, is pressuring the island to shift more chip manufacturing to the United States.

TSMC has invested US$265 billion in Arizona. Taiwan's economy minister stated that Taiwanese companies plan an additional US$20 billion investment in the country. Taiwanese officials acknowledge the need to expand manufacturing beyond the island. Foxconn's chairman Young Liu emphasized the need to "think about how to make with Taiwan, not in Taiwan; make with Taiwan in the country where the market is."

Taiwanese officials agree with this perspective. The EU is also seeking greater investment from Taiwanese companies, as both Taiwan and the EU support Ukraine and face trade and diplomatic disputes with China.