Taiwan's President Acknowledges Trump's Semiconductor Concerns, Vows Increased U.S. Investment and Defense Spending

Taiwan's response to Trump's threats about semiconductor industry control and its global supply chain strategy

Taiwan's President, Lai Ching-te, addressed the nation's approach to the semiconductor industry, particularly in response to U.S. President Donald Trump’s recent remarks. Trump had previously threatened to reclaim the semiconductor sector, accusing Taiwan of taking business away from the U.S. Lai expressed understanding of Trump's concerns, emphasizing that Taiwan plans to increase investment and purchases from the United States and commit to enhancing defense spending.

Lai’s comments came after Trump’s statement, in which he suggested that nearly all semiconductor production is now in Taiwan, with some in South Korea, and accused Taiwan of taking over U.S. companies’ chip manufacturing operations. Trump's remarks, pointing to companies like Intel, highlighted the shift of semiconductor production overseas and criticized Taiwan’s dominance in the global supply chain.

Taiwan’s President clarified that while Taiwan is aware of these concerns, it remains committed to fostering stronger ties with the U.S., its largest foreign investor, and reiterated that Taiwan is one of America’s most reliable trade partners. Lai indicated that the Taiwanese government would continue to work closely with the semiconductor industry to develop strategic initiatives and offer positive proposals to the U.S. government. The Taiwanese leadership expressed confidence that discussions with the U.S. would strengthen the two countries’ mutual interests, especially in the realm of semiconductor technology.

Taiwan is home to the world’s largest semiconductor foundry, TSMC (Taiwan Semiconductor Manufacturing Company), which supplies chips to major U.S. corporations such as Apple and Nvidia. TSMC has played a critical role in advancing global semiconductor production and was part of a significant investment by the company in the U.S. during Trump’s first term. In 2020, TSMC announced plans to construct a $65 billion manufacturing plant in Arizona, a move aimed at strengthening the U.S.-Taiwan semiconductor relationship.

Amid these tensions, Taiwan continues to leverage its semiconductor dominance, which has led to a historic surge in trade with the U.S. In 2024, Taiwan's exports to the U.S. reached a record high of $111.4 billion, and the country’s trade surplus with the U.S. increased by 83%. Lai’s government also suggested a broader international cooperation model, proposing the establishment of a "democratic supply chain" involving democratic nations, focusing on the development of advanced chips for emerging technologies like Artificial Intelligence (AI).

President Lai’s commitment to expanding Taiwan's semiconductor collaboration with the U.S. highlights the importance of global cooperation in managing the semiconductor ecosystem. While the geopolitical tensions between the U.S. and China over Taiwan remain significant, Taiwan’s efforts to bolster its semiconductor industry and strengthen its ties with the U.S. are seen as pivotal in maintaining its technological edge and economic stability.

In summary, Taiwan’s response to Trump’s semiconductor concerns reflects a strategic balancing act between maintaining technological leadership, ensuring strong defense alliances, and fostering a favorable trade environment with the U.S. As global supply chains become more complex and interdependent, Taiwan’s semiconductor industry remains a key player in shaping future technological advancements.