Talk of “de-Taiwanization” in relation to Taiwan Semiconductor Manufacturing Co’s (TSMC) establishment of factories in the US is a false, unrealistic and meaningless proposition that appears to have ulterior motives.
The structuring of the semiconductor industry worldwide is a result of the division of labor and cooperation among countries under the conditions created by globalization.
The US is the world leader in design, electronic automation tools and manufacturing equipment. The Netherlands is home to the leading maker of photolithography equipment. Japan is the main supplier of tools and chemicals. Taiwan is the main base for original equipment manufacturing of semiconductor components.
Without the cooperation of these countries, Taiwan would not be able to make its semiconductors. To put it simply, Taiwanese semiconductors are products of globalization.
By criticizing TSMC’s deployment in the US as “unprofitable” from an economic perspective, those say it is “de-Taiwanization” ignore an inherent characteristic of the development of the semiconductor industry, namely that globalization generates profit.
Taiwan’s strength lies in the completeness of its industrial chain, which includes world-famous companies in the fields of design, manufacturing, packing and testing, along with numerous peripheral support firms.
From a technological perspective, Taiwan is the world’s top manufacturing base for silicon wafers. Its weakness is that it relies on foreign suppliers for advanced semiconductor production equipment, while its limited supply of talent in basic scientific research and semiconductors is also cause for concern.
The US’ strength is that its semiconductor industry is at the forefront of supply and demand, putting it in a key position in the global semiconductor value chain. Notably, it has a considerable advantage in terms of research and development-intensive activities.
On the downside, the US still depends on other markets to perform key value-chain activities such as wafer fabrication, as well as assembly, packing and testing.
Consequently, Taiwan’s advantages would not just allow it to continue attracting investment. Indeed, overseas deployments by TSMC and other companies would enable them to each contribute their respective strengths, creating a win-win effect.
Taiwan can further research and develop higher-value processes and products to drive, create and make up for the deficiencies of its own industry.
Critics who question overseas deployments in terms of economic costs are deliberately denying the reality that all countries, including Taiwan, have been globalizing.
In particular, the modern world is interconnected politically and economically. Every government wishes to be self-sufficient in an industry as strategic as semiconductors.
TSMC’s deployments in the US and Japan do not suffer from the same risks and interference as happens in China, where the Chinese Communist Party directs the economy, employs “united front” tactics, puts ideology in the lead, and seeks to promote state enterprises over private ones and where “communist winds” are on the rise.
With respect to relations across the Taiwan Strait, China wants to invade Taiwan and is able to do so. If the Taiwan-US alliance is upgraded, it would boost Taiwan-US economic and trade ties, and give Taiwan better access to overseas markets that can be reached through the US.
The bargaining power of private enterprises in democratic societies cannot be underestimated. Governments and enterprises can be good partners in negotiations to create an environment conducive to industrial development, and this is something that China clearly lacks.
Seen from these perspectives, accusations of “de-Taiwanization” appear to have an ulterior motive.
Lai Rung-wei is an assistant professor and former manager of a financial company’s investment research office.
Translated by Julian Clegg
What began on Feb. 28 as a military campaign against Iran quickly became the largest energy-supply disruption in modern times. Unlike the oil crises of the 1970s, which stemmed from producer-led embargoes, US President Donald Trump is the first leader in modern history to trigger a cascading global energy crisis through direct military action. In the process, Trump has also laid bare Taiwan’s strategic and economic fragilities, offering Beijing a real-time tutorial in how to exploit them. Repairing the damage to Persian Gulf oil and gas infrastructure could take years, suggesting that elevated energy prices are likely to persist. But the most
In late January, Taiwan’s first indigenous submarine, the Hai Kun (海鯤, or Narwhal), completed its first submerged dive, reaching a depth of roughly 50m during trials in the waters off Kaohsiung. By March, it had managed a fifth dive, still well short of the deep-water and endurance tests required before the navy could accept the vessel. The original delivery deadline of November last year passed months ago. CSBC Corp, Taiwan, the lead contractor, now targets June and the Ministry of National Defense is levying daily penalties for every day the submarine remains unfinished. The Hai Kun was supposed to be
The Legislative Yuan on Friday held another cross-party caucus negotiation on a special act for bolstering national defense that the Executive Yuan had proposed last year. The party caucuses failed to reach a consensus on several key provisions, so the next session is scheduled for today, where many believe substantial progress would finally be made. The plan for an eight-year NT$1.25 trillion (US$39.59 billion) special defense budget was first proposed by the Cabinet in November last year, but the opposition Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) lawmakers have continuously blocked it from being listed on the agenda for
On Tuesday last week, the Presidential Office announced, less than 24 hours before he was scheduled to depart, that President William Lai’s (賴清德) planned official trip to Eswatini, Taiwan’s sole diplomatic ally in Africa, had been delayed. It said that the three island nations of Seychelles, Mauritius and Madagascar had, without prior notice, revoked the charter plane’s overflight permits following “intense pressure” from China. Lai, in his capacity as the Republic of China’s (ROC) president, was to attend the 40th anniversary of King Mswati III’s accession. King Mswati visited Taiwan to attend Lai’s inauguration in 2024. This is the first
RSS