Urgent Call for Collaboration in Chip Development Between U.S. and Taiwan
The Research Institute for Democracy, Society, and Emerging Technology (DSET), a Taiwanese government think tank, has proposed reinforcing cooperation between the United States and Taiwan on semiconductor development as a means to tackle the challenges posed by China.
According to DSET CEO Jeremy Chang, this collaboration is crucial to prevent the global industrial sector from becoming increasingly dependent on Chinese suppliers, which could pose significant geopolitical and economic challenges to the global democratic alliance.
The DSET's latest report, titled Let a Hundred Flowers Blossom, suggests several key strategies for this partnership. These include managed capacity planning to optimise semiconductor production capabilities between the US and Taiwan, joint research and development collaborations between non-Chinese firms, restrictions on semiconductor imports from China, and promotion policies that target specialized semiconductor processes critical for maintaining technological leadership.
Moreover, the DSET proposes that the US, Europe, and East Asian countries such as Taiwan and South Korea should reach a sectoral agreement to establish tariffs and outbound investment restrictions, create a free trade mechanism across the supply chain, and coordinate on capacity and specialized process development.
The focus, according to DSET, should be on building a strategic partnership around advanced semiconductor innovation and industrial capacity involving US-Taiwan collaboration, supported by coordinated policies that constrain China’s semiconductor ambitions.
This approach contrasts with policies threatened by the Trump administration, which could impose significant tariffs on Taiwan-made chips, potentially harming Taiwan and global industry cooperation without effectively containing China's rise in semiconductors.
Analysts project that PRC-based firms may account for nearly half of the world's new mature-node manufacturing capacity within the next decade. By 2027, China's market share is projected to rise to 47%, while Taiwan's share is expected to decrease to 36%. China's presence in the high-end tech arena allows it to play a key role in the supply chains of the defense industry.
The DSET warns that China's growing dominance in the semiconductor industry poses a risk to the US, Taiwan, and allied nations that rely on stable, diversified, and market-oriented supply chains. Ho Ming-yen, a non-resident DSET fellow, emphasised that the way democracies impose precise semiconductor export controls on China, particularly on raw materials used in mature chip production, would be crucial in determining their ability to curb Beijing's expansion in the sector.
In conclusion, the DSET's report underscores the importance of strengthening cooperation between the US and Taiwan on semiconductor development as a strategic response to China's rise in the global semiconductor market. This collaboration, supported by coordinated policies, could help maintain a stable, diversified, and market-oriented supply chain for the benefit of the global democratic alliance.
- The DSET's suggests that the US, Europe, and East Asian nations, including Taiwan and South Korea, should collaborate on finance policies to establish tariffs and outbound investment restrictions, create a free trade mechanism across the supply chain, and coordinate on capacity and specialized process development in the semiconductor industry.
- Technology advances in the semiconductor sector, particularly China's rising market share, could have significant implications for politics and general-news, as it may pose risks to the US, Taiwan, and allied nations relying on stable, diversified, and market-oriented supply chains.
