taiwan seeks strategic semiconductor alliances amidst us-china tensions
Taipei, Tuesday, 11 February 2025.
With the backdrop of U.S.-China geopolitical tensions, Taiwan looks to solidify its semiconductor industry ties to ensure stability and growth. The Taiwan Semiconductor Manufacturing Company (TSMC) is at the forefront of discussions aimed at strengthening partnerships. These moves are crucial given the critical role of semiconductors in modern technology, underscored by the recent pandemic-induced shortages. Integrated circuits, fundamental to countless devices from smartphones to medical equipment, showcase technological prowess. Taiwan’s ambition in this arena appears steadfast as it navigates international challenges. Meanwhile, the potential for U.S. tariffs looms, urging swift action from Taiwanese leaders to mitigate risks and ensure continued collaboration with American counterparts. In a landscape where technological and economic stakes are high, Taiwan’s strategy may determine its competitive edge in the global semiconductor supply chain.
Global market dynamics
TSMC, Taiwan’s semiconductor giant, reported January 2025 revenue of NT$293.2 billion [1], demonstrating the industry’s robust performance despite geopolitical pressures. The company faces complex challenges as former U.S. President Trump signals potential 100% tariffs on Taiwanese chip imports [2]. This development comes as Taiwan maintains its position as a critical supplier of advanced semiconductors, with the U.S. heavily dependent on Taiwanese imports for high-end chips [3].
Strategic response to pressure
Taiwan’s strategic approach includes encouraging semiconductor firms to increase U.S. investments [2]. TSMC’s Arizona expansion, which received $6.6 billion in U.S. government support [2], exemplifies this adaptive strategy. However, Taiwan’s government emphasizes maintaining core research and development capabilities domestically [3], balancing international collaboration with protecting its technological advantage [GPT].
International collaboration initiatives
The island nation is actively pursuing multilateral partnerships to strengthen its position. Semiconductors have emerged as the cornerstone of modern technology [1], making Taiwan’s role in the international supply chain increasingly critical. The government’s approach includes exploring cooperation with various global partners [4], aiming to create a more resilient semiconductor ecosystem while maintaining Taiwan’s competitive edge.