The government and local industries breathed a sigh of relief after Shin Kong Life Insurance Co last week said it would relinquish surface rights for two plots in Taipei’s Beitou District (北投) to Nvidia Corp. The US chip-design giant’s plan to expand its local presence will be crucial for Taiwan to safeguard its core role in the global artificial intelligence (AI) ecosystem and to advance the nation’s AI development.
The land in dispute is owned by the Taipei City Government, which in 2021 sold the rights to develop and use the two plots of land, codenamed T17 and T18, to the life insurer. Nvidia last year approached Shin Kong to acquire the land-use rights to accommodate its growing operations in Taiwan, where its major partners, such as chipmaker Taiwan Semiconductor Manufacturing Co (TSMC), are based. Nvidia’s memorandum of understanding with Shin Kong lapsed earlier this month after the city government rejected the proposal, as it would violate their contract and improperly benefit a private developer. Taipei insisted on terminating its contract with Shin Kong before leasing the land to Nvidia for the construction of its new Taiwan office, called “Constellation.” Under mounting public pressure, the life insurer said it would abandon the surface rights to the land “in the interest of the nation’s greater good,” to break the five-month-long impasse.
Shin Kong also made the about-face after the Taipei City Government and the Tainan and Kaohsiung city governments offered other land options.
Nvidia’s plans have been under a spotlight since they were announced in May last year as countries around the world are scrambling to build up their AI capabilities with the aid of the California-based company. It would be unwise for any government to abandon such an opportunity, amid reports that Nvidia is looking at India as a potential replacement for Taiwan.
Nvidia’s expansion project is particularly important for Taiwan, as the country aims to become an indispensable part of global AI supply chains, leveraging its strong semiconductor manufacturing capabilities. Closer collaborations with Nvidia would underscore Taiwan’s assertion that the nation is a strategic partner of the US in semiconductors and deserves lower tariffs.
Nvidia CEO Jensen Huang (黃仁勳) last year said in Taipei that the strong local ecosystem was one of the major factors behind the company’s decision to invest more in Taiwan. The strong work ethic of Taiwanese and Taiwan’s flexibility were also important elements, he said. In addition to TSMC, Taiwan has “incredible” chip testing providers, server makers, from Foxconn Technology Group to Quanta Computer Inc and Wiwynn Corp, and a lot more, Huang said. Nvidia planned to recruit about 1,000 engineers in Taiwan over five years for chip design, system design and software engineering, he said at the time.
Nvidia must have been stunned by the bureaucratic inertia of the Taipei City Government. It took more than five months for the US company to resolve the impasse, which might have been easily resolved in other countries that are eager to build up their AI industry. Taiwan is at risk of losing the chance to fortify its AI capabilities because of rigid rules, cumbersome legal procedures and government hesitance. With the endorsement of Nvidia, the central and local governments should work together to forge a more business-friendly environment to attract multinational AI companies to invest in Taiwan.
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