Taiwan should diversify: US academic

Taiwan's reliance on semiconductors presents a demographic challenge, as the industry's expansion outpaces the supply of engineers. This dynamic points to a need for government policy to actively diversify the economy, creating space for emerging sectors like robotics and biotechnology. Glenn D. Tiffert’s remarks at the DSET and SEMI forum in Taipei underscore that while chip manufacturing is vital, a singular focus could leave Taiwan vulnerable. Distributing semiconductor production to trusted overseas partners, such as TSMC’s Arizona fabs, strengthens Taiwan by enhancing global supply chain resilience. This strategy allows allies to maintain some domestic capacity while specializing in their strongest areas, rather than attempting full decoupling. Emiko Higashi of Kioxia Holdings Corp also noted that government subsidies alone cannot sustain chip projects, emphasizing the need for companies like Rapidus Corp to achieve viability through collaboration, such as its 2-nanometer technology partnership with IBM Corp. The thing to watch is how Taiwan balances its commitment to the semiconductor industry with concrete steps towards economic diversification. The success of distributed manufacturing models, exemplified by TSMC’s profitable Arizona operations, suggests a path forward that enhances both national and allied security without diminishing Taiwan’s core strengths.