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Taiwan eager to make ‘democracy chips’ in US

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As our colleagues from Challenges report, Taiwan is increasing its appeals to the United States in a context of growing tensions with the People’s Republic of China. It must be said that the history of the Republic of China (Taiwan) and the People’s Republic of China (mainland China) has always been complex. To sum up a bit quickly (the story that led to the current situation is really fascinating) before the communists came to power and the Japanese occupation in 1895, the island was an integral part of the territory of China.

In 1945, after the Japanese surrender, the nationalist forces of the Republic of China, opposed to the Communists, reached the island of Formosa aided by a small American contingent, and drove out what remained of the Japanese occupiers. They then took control of the administration of the island, de facto founding Taiwan as we know it today. At the time, the Republic of China (Taiwan) had territorial claims over all of mainland China.

Taiwan is preventively relocating part of its production to the USA, Japan and Germany

But the People’s Republic of China (China) also considered the island an integral part of its territory. Over time, and the rise of mainland China, communist officials imposed themselves as the only legitimate authority in the area – forcing all states wishing to maintain relations with mainland China to no longer recognize the Taiwan administration.

Taiwan has for its part known for a long time a nationalist dictatorial regime, which applied Martial Law from 1949 to 1987 suppressing all political opposition in blood and terror. But profound democratic reforms began at the end of this period. Reforms that will lead to the establishment of a pluralist democracy that is very open to the world – in parallel with an economic policy very much focused on industrialization and new technologies.

The advent of smartphones at the turn of the 2000s will stimulate the semiconductor sector, and lead to the creation, in particular, of a company which will become the subcontractor of choice for all the big names in tech – from Nvidia to Intel via Apple and Qualcomm. Today TSMC is a central link in the tech sector worldwide. And the prospect of a takeover by mainland China following a possible invasion frightens the United States, its allies and the authorities of Taiwan.

This is why the United States is multiplying gestures of support – and also why Taiwan is currently relocating part of its production to the United States, Japan and Germany. TSMC has notably invested 12 billion dollars to build a factory in Arizona. And intends to invest an additional 35 billion dollars to build a total of 6 factories.

Read also – TSMC is already thinking about chips engraved in 2 nm

This prompted, a few weeks after Nancy Pelosi the President of the American House of Representatives, the Governor of Arizona Doug Ducey (Republican) to visit the President of Taiwan Tsai Ing-wen. The president confirmed in a statement at the presidential palace the importance of this support and the manufacture of chips in foreign democracies in the face of threats from mainland China:

“Facing authoritarian expansionism and the challenges of the post-pandemic era, Taiwan is seeking to strengthen cooperation with the United States in the semiconductor industry and other high-tech industries. This will help build more secure supply chains. We look forward to jointly producing the Democracy Chips to protect the interests of our democratic partners and create greater prosperity”said Tsai Ing-wen.

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