Taiwan aims to elevate its strategic position in supply chains by becoming an artificial intelligence (AI) hub for Nvidia Corp, providing everything from advanced chips and components to servers, in an attempt to edge out its closest rival in the region, South Korea.
Taiwan’s importance in the AI ecosystem was clearly reflected in three major announcements Nvidia made during this year’s Computex trade show in Taipei. First, the US company’s number of partners in Taiwan would surge to 122 this year, from 34 last year, according to a slide shown during CEO Jensen Huang’s (黃仁勳) keynote speech on Monday last week. The list included local financial service providers, universities and research institutes. However, in an interview with TVBS, Huang revealed that figure to be even higher, saying that Nvidia was collaborating with 350 Taiwanese companies to build up the local AI industry.
Taiwan Semiconductor Manufacturing Co (TSMC), chip packaging and testing service provider Siliconware Precision Industries Co, server supplier Hon Hai Precision Industry Co, Wiwynn Corp and Quanta Cloud Technology are already among Nvidia’s most important partners in Taiwan, while local mobile phone chip supplier MediaTek Inc and custom chip developer Alchip Technologies Ltd are the first among the world’s prestigious chip designers to supply components to support Nvidia’s high-speed interconnect technology, NVLink Fusion. That is the first time Nvidia has given other companies access to the technology, which is integral to enhancing servers and data centers.
Second, Nvidia plans to build a new office, called the Nvidia Constellation, in Taipei’s Shilin District (士林) to manage its operations and relationships in Taiwan, ending nearly a year of speculation. “It stands to reason that Taiwan [is] at the center of the most advanced industry, the epicenter where AI and robotics is going to come from,” Huang said.
Third, and most importantly, Nvidia aims to build the biggest supercomputer in Taiwan together with TSMC, Hon Hai and the National Science and Technology Council, which would greatly upgrade Taiwan’s AI infrastructure and locally developed large language models.
With such strong AI computing power, Taiwan would be able to bolster its AI capabilities and enhance its AI sovereignty resilience, which are essential for any country to boost its economic competitiveness and development. Taiwan is evidently ahead in the race of global sovereign AI development, thanks to relentless private research and development, along with the government’s industrial policies. The government’s efforts are bolstering the nation’s development of AI computing power, dataset collection, talent cultivation, marketing and funding for start-ups, with an aim to build an AI-friendly environment.
However, one key element is missing — a resilient energy policy. The new AI supercomputer is supercharging the need for electricity to operate data centers, adding to the already tight power supply, as Taiwan switches to more green energy sources, including solar and wind power. The supercomputer’s power consumption would start with 20 megawatts this year and would soon grow to 100 megawatts, Huang told TVBS, adding that the only limitation is the availability of energy. “We really hope the Taiwanese government can support us with that,” he said.
Some suggest bringing online already decommissioned nuclear reactors, while others advocate for the adoption of new small modular reactors, with fewer safety concerns to complement less resilient solar or wind power sources. No matter what types of energy, the government should be evaluating the feasibility amid fast-growing electricity consumption.
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In China, competition is fierce, and in many cases suppliers do not get paid on time. Rather than improving, the situation appears to be deteriorating. BYD Co, the world’s largest electric vehicle manufacturer by production volume, has gained notoriety for its harsh treatment of suppliers, raising concerns about the long-term sustainability. The case also highlights the decline of China’s business environment, and the growing risk of a cascading wave of corporate failures. BYD generally does not follow China’s Negotiable Instruments Law when settling payments with suppliers. Instead the company has created its own proprietary supply chain finance system called the “D-chain,” through which
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