Taiwan semiconductors: president-elect William Lai vows to ‘continue to assist’ sector

‘China and other countries must also cherish’ Taiwan’s role in global chip industry, Lai says after victory on Saturday
Frayed cross-strait ties and US-China tensions have sparked concerns about the core sector seen as a ‘silicon shield’ for the island

Taiwan election 2024

Frank Chenin Shanghai

Published: 2:20pm, 14 Jan 2024

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Delivering his acceptance speech on Saturday, Taiwan’s president-elect William Lai Ching-te vowed to spare no efforts to further develop the island’s critical chip and semiconductor industry.

“As president, I will continue to assist the development of the semiconductor industry, from materials, equipment, research and development, integrated circuit design, manufacturing to wafer fabrication and testing for the industry to build a comprehensive cluster and further its development in Taiwan. This will of course benefit the global economy as well,” Lai said in Taipei.

Taiwan produces about 60 per cent of the world’s semiconductor chips, and most of the bleeding-edge circuits that power the latest smartphones and supercomputers. Along with its strong original equipment manufacturer (OEM) edge in producing wafers – the building blocks of chips – and key role in the industrial supply chain, this creates what is touted as a “silicon shield” for the self-governed island.

However, concerns about the safety of the global semiconductor supply chain with Taiwan as a key node have mounted in recent years, in line with frayed relations across the Taiwan Strait and tensions between Beijing and Washington – a key supporter of Taiwan.

Taipei is also under pressure from Washington to move key production to the United States, though incumbent President Tsai Ing-wen and her Democratic Progressive Party (DPP) have long assured support for top chip makers like Taiwan Semiconductor Manufacturing Company (TSMC) to keep most of the research and development and production onshore.

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Calling the Taiwanese industry “the world’s common asset”, Lai said Taiwan had a responsibility to ensure that the global community could also benefit from its advantage in chip-making.

“The advancement of the industry is the result of division of labour around the world. Not only does Taiwan need to cherish its achievement, China and other countries must also cherish this industry.”

Lai’s victory on Saturday ensured an unprecedented third term in a row for the independence-leaning DPP.

Beijing – which sees Taiwan as a part of China, to be reunited by force if necessary – has described Lai as “an obstinate Taiwan independence worker” who would further promote the separatist cause if he came to power.

Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.

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Taiwan has also become caught up in the US-led tech war against Beijing, with chips and semiconductors front and centre in Washington’s strategy to contain Chinese hi-tech development.

US bans and export restrictions have cut off Huawei and other Chinese tech giants’ access to advanced chips from TSMC, which has been producing less advanced chips at its foundries in mainland China.

Washington has also urged TSMC to shift staff and production elsewhere, with the chipmaker’s Arizona plant readying trial production.

TSMC’s Arizona foray and expansions in Japan have fuelled worries about the hollowing-out of Taiwan’s core chip making industry, but both Tsai and Lai have dismissed such concerns.