My TakeUS threatens to hollow out Taiwan’s hi-tech industry in the guise of defence
- Having been promised security by Washington, Tsai Ing-wen’s legacy has been to expose the island to ever greater insecurity, both military and economic
Thanks to Tsai Ing-wen and her Democratic Progressive Party, Taiwanese people are learning first-hand the true meaning of Henry Kissinger’s famous dictum, “To be an enemy of the US is dangerous, but to be a friend is fatal.”
The contest between the United States and China for primacy in Asia is driving fundamental changes in the region’s geopolitical and economic order. And under Tsai, Taiwan has, with great effort and commitment, turned itself into the epicentre of this conflict that will shape international politics for the rest of the century.
This has resulted in far greater insecurity for the island by supposedly securing a more explicit guarantee from Washington in the event of a war over its independence. Already, the de facto US alliance is hollowing out its hi-tech sector; its world-beating semiconductor industry is being undermined, not by the mainland, but the US. That’s why the presidential election on the island in January will be fascinating to watch.
It’s ironic that Tsai and the DPP have made a successful career out of trumpeting the failure of “one country, two systems” as a model of unification and the threat posed by the mainland to the island. That has been music to Washington, which is more than happy to fan the flames for a potential fratricide across the Taiwan Strait.
Now, though, according to a report by Bloomberg, Taipei has been using backchannels to quietly ask Washington to tone down its rhetoric about the dangers of relying on the supplies of the most advanced semiconductors from the island.
How predictable! Just look at what’s happening to TSMC, one of a handful of producers of the most advanced chips in the world and the pride and joy of the island’s tech industry. It was, for many years, one of Warren Buffett’s major holdings. But recent corporate filings show his flagship Berkshire Hathaway cut its stakes in TSMC by 86 per cent in the fourth quarter, the reason cited being geopolitical risks over Taiwan.
Meanwhile, TSMC has been compelled by the Americans to shift production offshore to the US with a US$40 billion investment in Arizona. That is part of the industrial policy under the Joe Biden administration to redevelop America’s domestic hi-tech industry, but it has led to warnings by the opposition in Taiwan that the island’s own industry is being hollowed out.