Taiwan-US Semiconductor Collaboration: A Win-Win Model
The semiconductor relationship between Taiwan and the US is a mutually beneficial model, the Taiwanese government emphasised on Tuesday, responding to tariff threats from former US President Donald Trump. The high level of complementarity of the Taiwan-US semiconductor relationship strengthens their partnership in this critical sector.
Taiwan’s Key Role in the Global Tech Supply Chain
Taiwan is home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC). As a key player in the global technology supply chain, Taiwan supports major US companies like Apple and Nvidia. This collaboration highlights Taiwan’s importance in advancing cutting-edge technologies.
Trump announced plans to impose tariffs on imported semiconductors, pharmaceuticals, and steel, aiming to encourage domestic production in the US. However, Taiwan’s economy ministry defended the current partnership, calling the US-designed and Taiwan-foundry model a “win-win” for both countries.
Strong Cooperation Amid Challenges
The ministry reiterated its commitment to close cooperation with the US to protect mutual industrial and national interests. “Taiwan and the US industries are highly complementary, particularly in semiconductors. This creates a mutually beneficial model,” the ministry stated.
Taiwan’s presidential office echoed this sentiment, highlighting the strong mutual trust and close ties between the two nations in high-tech sectors. It described their collaboration as a “win-win situation” that benefits both sides.
TSMC’s Investment in the US
In 2020, during Trump’s first administration, TSMC committed to building a $12 billion factory in Arizona. This investment, a significant move to secure global technology supply chains, has since grown to $65 billion. Despite Trump’s recent tariff remarks, TSMC declined to comment, reflecting its focus on existing commitments.
Taiwan’s Economy Minister, Kuo Jyh-huei, noted that any potential impact from US tariffs on semiconductors would likely be limited, given Taiwan’s technological edge.
Taiwan-US Trade Relations
Taiwan’s trade surplus with the US surged 83% in 2024 compared to the previous year, with exports reaching a record $111.4 billion. This growth was driven by strong demand for high-tech products, particularly semiconductors.
Although Trump’s push for investigations into trade deficits and alleged currency manipulation could pose challenges, Taiwan remains confident in its ability to navigate these issues while maintaining its strong partnership with the US.
With inputs from Reuters