The shift towards AI could also improve Taiwan's trade relations with other countries in the "democratic camp," as the country has been increasing exports to the US, India, and Southeast Asian countries. This comes amid growing tensions in the Taiwan Strait and concerns about a possible Chinese invasion of Taiwan. The US overtook China as Taiwan's top export destination at the end of 2023, and Taiwan is looking forward to cooperating with the US after President-elect Donald Trump takes office in January.
Key takeaways:
- Taiwan plans to invest $1 billion annually into its AI industry, aiming to generate at least a tenfold return on its investments, according to its technology minister Wu Cheng-wen.
- The move is part of Taiwan's strategy to diversify its economy away from semiconductors and China, with AI seen as a critical issue for the nation's security.
- Taiwan Semiconductor Manufacturing Co. (TSMC) has stopped providing its advanced AI chips to Chinese clients and is considering building 2-nanometer chip plants in allied nations.
- The shift towards AI and away from China is also influenced by the potential threat of 60% tariffs on US imports from China, with the US overtaking China as Taiwan's top export destination at the end of 2023.