Analysis: United States' Role in the Global Semiconductor Industry
In the realm of global technology, the US and Taiwan are forging a strategic partnership to counterbalance China's growing influence in the semiconductor industry. President William Lai of Taiwan has expressed his administration's commitment to deepening collaboration with the US, focusing on joint construction of a secure and robust "non-red" supply chain, free from Chinese control.
The US President, Donald Trump, has implemented tariffs on semiconductors, including those produced by TSMC, a key member of the Semiconductor Industry Association. However, the future of the US semiconductor industry is closely linked with democratic partners in East Asia, particularly Taiwan, and experts warn that imposing tariffs could harm Taiwan and disrupt global supply chains.
Instead, the Research Institute for Democracy, Society and Emerging Technology (DSET) advises against tariffs and advocates for cooperation. The DSET report emphasises joint research and development and coordinated production capacity among the US, Taiwan, and allied non-Chinese firms, aiming to advance specialized chip manufacturing processes outside of Chinese influence.
Taiwanese leadership, including Vice President William Lai, has articulated a commitment to this collaboration. In a February meeting with the then-US deputy national security adviser Matt Pottinger and retired US rear admiral Mark Montgomery, President Lai reaffirmed his administration's goal of jointly constructing a secure and robust "non-red" supply chain with Washington.
The DSET chief executive officer, Jeremy Chang, has warned that China's continued expansion in the semiconductor sector could disrupt critical links, including those supporting the defense industry. A more tightly knit, cooperative network of "non-red" chipmakers would be far more capable of withstanding Chinese competition and coercion.
DSET non-resident fellow Ho Ming-yen has urged democracies to forge stronger partnerships in the semiconductor sector, enabling free trade and coordinating on production capacity and specialized process development. Taiwan should seek to engage constructively with the Trump camp and future US administrations to stress the importance of avoiding harmful tariffs and restrictions on "non-red" supply chain producers.
The Trump administration's tariffs are threatening the vision of building an integrated, secure, and democratic tech ecosystem in partnership with Taiwan. Preserving open trade among trusted democratic partners is not merely an economic concern - it is a strategic imperative. The strategic importance of ensuring that TSMC, a crucial component of the US economy, does not fall under China's influence is recognized.
Experts urge that the US and its allies focus on market-driven supply chains with open trade, coordinate capacity and innovation efforts, and implement measures like restrictions on Chinese imports and promotion of allied firms' technologies to build resilience against economic coercion by China.
In summary, the current strategy centres on strengthening US-Taiwan semiconductor ties through collaboration, avoiding trade barriers, building resilient and secure supply chains, and jointly innovating to maintain democratic technological leadership and counterbalance China's industry growth. The US should be involved in initiatives to enhance the semiconductor industry's global resilience, especially among its democratic allies.
The US-Taiwan collaboration in the semiconductor industry, as part of their strategic partnership, is being influenced by politics and general news, with experts advocating for market-driven supply chains and joint innovation to maintain democratic technological leadership. This cooperation could impact the financial sector, as the success of the partnership could significantly influence the economy of both countries and the global market.
The involvement of the Research Institute for Democracy, Society and Emerging Technology (DSET) in advocating for cooperation in semiconductor research and development highlights the intersection of technology and politics, as this cooperation could potentially affect the balance of power in the global tech sector and the geopolitical landscape.
