Taiwan's global AI role pivotal, US analyst says - Taipei Times

• By Fan Wei-li / Staff reporter

Taiwan's pivotal role in the global artificial intelligence (AI) supply chain is irreplaceable for the foreseeable future, but underinvestment in asymmetric defense would be concerning, a former White House National Security Council (NSC) official told a Research Institute for Democracy, Society and Emerging Technology forum in Taipei yesterday.

Taiwan and the US should not lose sight of the big picture over short-term tactical issues, and must collectively improve deterrence to protect their indispensable technological lifelines, said David Feith, a senior fellow at the Washington-based Hudson Institute and former senior director for Technology and National Security at the NSC.

There are still misconceptions within the US regarding the "supply chain relocation" of semiconductors, Feith told the Taipei-based think tank's annual forum, titled "National Strategic Summit on Supply Chain Resilience."

Photo: Fang Pin-chao, Taipei Times

While Taiwan Semiconductor Manufacturing Co (TSMC) has set up facilities in Arizona and achieved a milestone by producing Blackwell wafers in October last year, it does not mean "the US will no longer need Taiwan within 18 months," as some rumors have claimed, he said.

The US-made wafers need to be sent to Taiwan for advanced packaging and other manufacturing processes, he added.

Expectations regarding the speed and advancement of "onshoring" are sometimes overly optimistic, which masks the fact that the US will remain immensely reliant on Taiwan's hardware manufacturing ecosystem for many years to come to maintain its AI global leadership, Feith said.

Taiwan and the US face the strategic risks of "underinvestment" in two main areas: onshoring in the US and defense capability in Taiwan, he said.

Although TSMC chairman and chief executive officer C.C. Wei's (魏哲家) visit to the White House in March has set an excellent tone for Taiwan-US diplomacy, domestic challenges in the US, such as factory permits and labor restrictions, might still limit the efforts of Taiwanese firms in the US, ultimately inflicting immense political and strategic damage on Washington, he said.

Supply chain relocation needs to speed up and not be limited to advanced manufacturing processes, with packaging, printed circuit boards and other mature processes like those of United Microelectronics Corp needed, Feith said.

That would prevent China from weaponizing control over foundational mature chips to coerce global supply chains, as it did with rare earth elements, he said.

The other risk is if Taipei underinvests in its national defense, Feith said, adding that Taiwan's investments in its defense budget, overall spending, and drones and other asymmetric capabilities, have yet to reach a proportion commensurate with its wealth levels and the security risks it faces.

This is seen as a genuine strategic concern in Washington, he said.

The fundamental reason for discussing supply chain resilience is because Chinese President Xi Jinping (習近平) and the Chinese Communist Party seek to annex Taiwan, he said.

People in Taiwan and the US should not lose focus over short-term tactical issues, such as potential delays in arms sales following a meeting between US President Donald Trump and Xi, but should instead point out that Beijing's hostile and destructive strategic designs constitute the single source threatening global peace and technological prosperity, Feith said.

Chris Miller, a nonresident senior fellow at the Washington-based American Enterprise Institute and author of Chip War, told the forum that the international community should give Taiwan greater recognition.

Foreign media often describe Taiwan as "the most dangerous place on Earth," which is completely incorrect in terms of causality, because the true source of risk is China, not Taiwan, Miller said.

Accurate wording should be used to clarify the source of the risk, which would help lead to the correct solution — namely, that China must cease its intimidation, while Taiwan and the US should boost their deterrence capabilities to mitigate the risk, he said.

Trump's claim that "Taiwan stole our chip industry" is factually inaccurate, as an examination of trade data reveals that US enterprises have consistently viewed Taiwan as an indispensable and trustworthy technological partner, he said.

Addressing the claim that the US is "hollowing out" Taiwan's chip industry, Miller said the comment is obviously a flawed political weapon, as Taiwan's semiconductor industry is experiencing its best-ever development.

Anyone who believes Taiwan is being hollowed out has clearly not been to Hsinchu or Tainan in a very long time, he added.