Semiconductors as a Catalyst for U.S.-Taiwan Cooperation and Commitment

Semiconductors as a Catalyst for U.S.-Taiwan Cooperation and Commitment

U.S.-Taiwan semiconductor collaboration would allow the United States to deepen its commitment to Taiwans’ democracy and help deter threats to end it, argue Kharis Templemena and Oriana Skylar Mastro in a new report.
tsmc logo on taichung factory building TSMC logo on Taichung factory building. Wikimedia Commons

As the AI boom fuels an unprecedented surge in demand for chips and computing power, the global semiconductor supply chain has become critical in everything from smartphones and medical devices to cars and fighter jets. At the heart of this industry stands Taiwan, a leader in chip-making infrastructure, encompassing fabrication to cutting-edge research and development. With the People's Republic of China’s threat to Taiwan’s prosperity and stability becoming more acute, it is time for the United States and Taiwan to deepen their partnership in the semiconductor industry, argue Hoover Institution Research Fellow Kharis Templeman and FSI Center Fellow Oriana Skylar Mastro.

In a chapter that is part of a new report, titled “The Silicon Triangle: The United States, Taiwan, China, and Global Semiconductor Supply,” Templeman and Mastro show what the United States might learn from Taiwan’s successful experience in building a leading global role in the semiconductor supply chain and offer concrete opportunities for deeper collaboration given the two nations’ shared interests in chips.  The report is a product of the Working Group on Semiconductors and the Security of the United States and Taiwan, a joint project of the Hoover Institution and the Asia Society Center on U.S.-China Relations.

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Templeman and Mastro’s chapter, “Deepening US-Taiwan Cooperation through Semiconductors,” outlines the history of the Taiwanese semiconductor industry, accounts for its meteoric rise to prominence, and proposes that the United States and Taiwan should seek to use the semiconductor industry to “promote Taiwan’s prosperity and stability by creating an environment that fosters deeper business-to-business, research, academic, individual, and civil ties with Taiwan and other global partners in the semiconductor arena.”

To do so, the authors argue, the United States should actively promote Taiwan semiconductor firm activities, including manufacturing, design, and joint research and development in the United States; income tax abatement for cross-border workers; two-way semiconductor internship programs and academic exchange; semiconductor supply chain information sharing and resiliency planning; and defense industry co-production in Taiwan.

Deterring Invasion

According to Templeman and Mastro, further investment in Taiwan’s semiconductor industry would strengthen long-term U.S. interests there and represent an opportunity for the two nations to broaden their shared civil and business ties that will help to “deepen U.S. commitments to Taiwan’s democracy—and [deter] efforts to end it.”

The authors consider the PRC’s increasingly aggressive rhetoric of reunification and suggest that “leaders in the United States and Taiwan should be realistic about the real threat that the island faces, and their response to that should be to build the capabilities and the confidence of their people to weather coercion and deter attack.” As such, semiconductors represent a natural opportunity for the two nations to “grow substantive people-to-people, business, and even appropriate government ties at the working level […] we can use this momentum to break through long-standing bureaucratic frictions and improve interoperability in our economic and security relationships.”

The PRC threat to Taiwan’s autonomy will continue to grow as the island is increasingly isolated from the broader international community, the authors write. Reversing this trend, they say, “requires both symbolic and substantive assistance on the part of the United States and other countries.”

Deepening collaboration in the semiconductor industry represents a path for the United States to demonstrate its commitment to Taiwan, independent of the rhetorical debate over strategic clarity or ambiguity. The momentum gained through this collaboration would aid Taiwan’s resilience and incentivize other governments and opinion leaders in the region to deepen their commitments to the island, further enhancing cross-strait deterrence.

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