The US is engaged in trade and technology wars with China and has been developing its “free and open” Indo-Pacific strategy. At such a time, Taiwan unavoidably occupies a key strategic position.
Signs of its importance can be seen from recent overseas media reports that the US government is calling on Taiwan Semiconductor Manufacturing Co (TSMC) to build a factory in the US, and from former TSMC chairman Morris Chang’s (張忠謀) remark that TSMC itself would occupy a key position for geopoliticians.
Although Taiwan’s government and TSMC have both denied the report about a US factory, the volatile state of international geopolitics does not allow Taiwan to take it lightly.
This is all the more true with the approach of presidential and legislative elections. The contrasting positions of the contending political camps make it hard to predict what road lies ahead for Taiwan.
The US has amended its China policy of the past four decades to now view China as a “strategic competitor” rather than a “strategic partner.”
US President Donald Trump has invoked the International Emergency Economic Powers Act (IEEPA), which authorizes him to impose sanctions in response to any matters that harm US national security or foreign policy interests, and affects Chinese high-tech companies such as Huawei Technologies Co, ZTE Corp and DJI Technology Co.
Although TSMC contends that the content of its products meets the minimum 25 percent content of US origin as stipulated by the de minimus rules of the US’ Export Administration Regulations, this calculation could well be challenged.
For example, is equipment included in the calculation? If the US changes to applying the standard of 15 percent that applies to terrorist or totalitarian countries, would TSMC still make the cut?
The most important consideration is that, in relation to products that are manufactured in the US and affect US national defense and security, the US might require manufacturers to set up factories in the US to make them — in line with the National Security Act and the IEEPA — so as to prevent infiltration and technology leaks.
If such a situation arises, it would not just be a matter of TSMC having to set up a factory in the US. It would also show that the US is starting to lose confidence in the security of products manufactured in Taiwan, and it might also show that it lacks confidence in Taiwan.
Especially given Taiwan’s role and importance in the US’ Indo-Pacific strategy, we cannot afford to take this issue lightly.
Chinese infiltration in the approaching general elections, and the attitudes of some candidates might make the US even less confident about Taiwan. Taiwan and the business community must handle this issue cautiously, because one wrong step could have long-term repercussions.
Taiwan should not underestimate its own importance. Under the US’ “free and open” Indo-Pacific strategy, the US government strongly encourages US manufacturers to invest and set up factories in Taiwan.
Recently, major US network companies, including the big five “FAANG” corporations — Facebook, Amazon, Apple, Netflix and Google — have been setting up shop in Taiwan, as have major US semiconductor manufacturers and software companies.
Some of them have established research and development centers, or are planning to do so. They are collaborating with Taiwan on the most advanced manufacturing processes and networks. Taiwan’s grasp of strategically superior technology gives us all the more reason to use these investors’ influence to bolster national security.
In recent years, the US government and businesses have been paying a lot of attention to Taiwan, as demonstrated by the words and actions of US institutions in Taiwan.
For example, at the Semicon Taiwan semiconductor trade show in September, American Institute in Taiwan (AIT) Director Brent Christensen said that Taiwan can “shape not only the future of high-tech supply chains, but in a very real sense the future of the entire world.”
He said that the US and Taiwan should work together closely, especially in the field of semiconductors, with joint investments in semiconductors and increased investment in the US by Taiwan’s leading semiconductor firms.
At the Talent Circulation Summit on Nov. 5, Christensen said that the AIT, through the Talent Circulation Alliance, seeks to grow Taiwanese talent, prevent a brain drain, expand Taiwan’s international presence and help it further its transition to an innovation-based economy.
Taiwan’s pivotal position in the US’ Indo-Pacific strategy, along with its advanced technological capabilities, clearly compels the US to fully recognize its importance. Indeed, Taiwan plays an important role in many respects.
Let us hope that Taiwanese voters would make the choice that leads Taiwan to a beneficial direction and aligns us with the best collaborative partners.
By making the right choices, Taiwan can achieve long-lasting security and development.
Ray Chung is manager of Honeywell Taiwan’s contract and law department.
Translated by Julian Clegg
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