Showing off renovations at Taipei’s Sonsghan Airport, guides emphasize gleaming new duty-free shops, expanded concourses, and tech upgrades like an AI-powered robot that greets passengers in the terminal.
But an offhand comment from officials at the Civil Aviation Authority reveals the real claim to fame of the downtown air hub popular with business travelers.
“Jensen Huang’s jet landed here today.”
Mr. Huang, of course, is the Taiwanese-born founder and CEO of Nvidia, the world’s first $4 trillion company and the largest and maker of its most advanced graphic processing units, the chips powering the artificial-intelligence revolution.
When Global Atlanta visited Taipei September, Mr. Huang was presumably in town for Semicon, a conclave attended by more than 100,000 leaders from an industry led by one gargantuan player: Taiwan Semiconductor Manufacturing Co.
As a single company, TSMC’s trillion-dollar market capitalization exceeds Taiwan’s $800 billion GDP. The company, and the ecosystem it propels, almost singlehandedly drove Taiwan’s economic growth up above 4 percent in 2024.
Globally, Taiwan accounts for about 90 percent of the world’s most advanced chips, a concentration known as the “Silicon Shield,” given the argument that advanced economies like the United States would have a vested interest in protecting Taiwan in the event of a Chinese invasion.
Where Taiwan’s argument once relied on values — democracy and human rights, it now pushes “value-added.”
“I think Taiwan is a force for good in the world, and when we align with our allies or like-minded countries, I will ask one question: What can Taiwan do for you?” Foreign Minister Lin Chia-lung told news outlets including Global Atlanta at a press briefing.
Still, since President Donald Trump came into power, Taiwan’s chip-industry dominance has, perhaps ironically, driven a trade spat with its biggest security guarantor, leading to tough questions about how the island of 23 million people will walk the tightrope between appeasing America while maintaining its technological edge and security hedge against China.
During the trip, organized and paid for by the Ministry of Foreign Affairs, Global Atlanta spoke about this and other topics with experts from academia, think tanks and government agencies.
A Victim of Its Own Success?
As we visited, Taiwan was locked in negotiations with the U.S. to remove a 20 percent Trump tariff that has hit its manufacturing sector — dominated mostly by small and medium-sized companies — hard.
In a way, Taiwan’s trade battle with the U.S. comes thanks to TSMC’s success, and in spite of dizzying stock market highs American tech giants like Nvidia have enjoyed, even as they rely on massive Taiwanese fabrication plants.
“This storm, or this negotiation, came at not a very good time,” says Kristy Hsu, head of the ASEAN center at the Chung-Hua Institution for Economic Research, or CIER, a Taipei think tank, pointing to the “AI boom” of the last few years.
“It happened because we see strong demand in AI chips and also other things in the U.S., and therefore our exports to the U.S. increased significantly … and that of course, made Trump not very happy,” she said.
Mr. Trump famously used American trade deficits to calculated his reciprocal tariffs in April, landing Taiwan a 32 percent levy. That was later reduced to 20 percent by Aug. 7, with semiconductors exempted under a Section 232 national security review that has yet to lead to a verdict.
Meanwhile, Taiwanese exporters of steel and aluminum products have been hit with Mr. Trump’s stacking 50 percent metals tariffs. While Commerce Secretary Howard Lutnick promised “something big” with Taiwan in October, and Taiwanese negotiators have signaled optimism in recent days, no sweeping deal has yet been announced.
When $165 billion Isn’t Enough
Notably, the turmoil came only after TSMC announced a generational investment in Arizona, a $65 billion investment into three fabrication facilities envisioned as a reboot of America’s lost chip sector. The project qualified for CHIPS Act incentives under President Biden, and once Mr. Trump returned to office with new tariff threats, TSMC pledged another $100 billion toward more fabs along with packaging plants and a research center.
But even such largesse has not satiated the Trump administration’s demands that Taiwan localize more chip production in the U.S. Mr. Lutnick said this week he believes TSMC’s investment could eclipse $200 billion, though Taiwan’s president, Lai Ching-te, said talks are ongoing, and further investment will depend in part on what the U.S. can put together.
“Of course (Mr. Trump) wants to do anything to have the whole supply chain come to the U.S., and with that, I think the Taiwanese government has very little room to bargain and also to negotiate,” Ms. Hsu at CIER told Global Atlanta.
But it’s not just pouring in money at this point; it’s about risk and profitability. Arizona has proven costlier than expected for TSMC, and reports have described clashes between the always-on work culture within a sector deemed existential in Taiwan with American views of work-life balance.
Lai Chih-huang, vice dean of the College of Semiconductor Research at the National Tsing Hua University, just a 20-minute walk from from the gates of TSMC’s Hsinchu fortress, says Taiwan’s work culture is changing, but slowly. Taiwanese fabs expect a problem in the clean room detected at 2 a.m. to be fixed by 3. And that’s not because the engineer is on-site. It’s because they’re on-call.
“(That it gets fixed) is not the most surprising thing. The most surprising thing in Taiwan is that your wife doesn’t complain. Unfortunately, this kind of thing won’t happen in U.S.”
Even still, Lien Hsien-ming, president of the CIER, said more of the chip ecosystem may have to move to the U.S. to appease the president.
“Even if Taiwan has decided to double the amount, I doubt we would be able to compete or finish all that within a short period of time, but Trump likes the big numbers,” Dr. Lien said, so Taiwan may have to move ahead.
Or, perhaps an elusive trade deal hasn’t come because TSMC meets just one of the “three bigs” Mr. Trump has sought in talks with Taiwan’s peer (and competitor) nations in Japan and South Korea: “big investment, big purchases, and opening big to U.S. companies,” Dr. Lien said.
Lien Hsien-ming, president of the think tank CIER, said more of the chip ecosystem may have to move to the U.S. to appease the president.
Along big investment pledge in strategic sectors like shipbuilding, both South Korea and Japan have tacked on hundreds of billions in energy purchases while sprinkling in measures to open their markets to U.S. firms in vital sectors like agriculture and energy.
A final theory on the delay? Taiwan is hamstrung by its nebulous status in international bodies, an issue forced by China, which sees the island as a rogue province. The U.S., which subscribes to the One China policy, does not have official diplomatic ties with Taiwan, making it challenging to engage in the kind of one-on-one negotiating Mr. Trump relishes, Dr. Lien said.
“You have to make him feel that he actually won. That is very very important, and unfortunately, Taiwan didn’t have the opportunity,” he added. “Therefore when we reach a deal with the minister or the secretary, in the end, it is going to be turned down by Trump because he says this isn’t good enough.”
Trusted Tech Diplomacy: The Democratic Differentiator
Despite the vulnerabilities of a lopsided economy, Taiwan sees an strategic opening for blending democratic ideals, economic vitality and tech prowess in this new age of overlap between economic and national security.
With the war in Ukraine proving that the future of warfare is digital, and artificial intelligence raising ethical concerns, Taiwan believes its democratic status brings the assurance of a “trusted partner,” Foreign Minister Lin said during the briefing.
“Taiwan should leverage our strengths and advantages in liberal democracy, in security alliances, and in economic prosperity. We want to develop Taiwan into a middle power, and also a pivotal state strategically located at the front line of the first island chain in the Pacific … supply chains and global democratic value chains,” Mr. Lin said, citing his “three chains” strategy.
Taiwan sees itself as “indispensable” in the AI-powered world, not only investing in the U.S., but also in third countries, from Japan to the Czech Republic, Vietnam and the Philippines, the foreign minister added.
“Taiwan can play a kind of linking role to connect with other countries that would like to join these supply chains,” Mr. Lin said.
It’s the continuation of a strategy to reduce Taiwan’s economic reliance on China, which took 84 percent of Taiwan’s outbound investment in 2010. That number dropped to under 8 percent last year.
While some experts worry that too much outbound investment could run counter to Taiwan’s goals, some point out that even with the U.S. investment, Taiwan will still have 70 percent of the most advacned chip-making capacity at home.
An exhibit hall at SemiCon shows another reason experts aren’t worried about the Silicon Shield rupturing anytime soon: the massive baked-in ecosystem. Hordes of attendees swarmed the floor to take in chip-making machines, specialty glass and packaging technologies and robots welding circuits or gingerly flipping wafers. Poland, France and the U.S. had pavilions peddling semiconductor and AI applications.
Taiwan’s Industrial Technology Research Institute, a massive campus in Hsinchu, focuses on commercializing Taiwanese innovations in AI and beyond.
One Korean executive told Global Atlanta that the U.S.-China trade war has been good for his company, enabling it to sell to both sides as each remained suspect of the other, but he was at the convention for one prize: an audience with TSMC.
Chieh Tzi-dar, a professor at National Taiwan University, said it’s true that Taiwan is perhaps too top-heavy, invoking the specter of the so-called “Dutch disease” resource curse that usually applies to oil-rich countries. But Taiwan shouldn’t give up on its competitive advantage, he said.
“If there’s a decline or there’s a downturn or semiconductors, indeed the Taiwanese economy will suffer. Right now, the only prospering Taiwanese industries are AI-related servers and chips. Those make up a lot of our foreign trade surplus, and hence our very high tariff rate,” Dr. Chieh said. “Still, it’s like you have a very strong baseball team and you would like to make it stronger: You don’t want to send all your players to play football.”
The answer, he added, is to integrate smart technologies and AI into other sectors like health, agriculture, chemicals and beyond, reaping benefits while creating new innovations that can be monetized at home and around the world.
To achieve this, Dr. Chieh leads the Chip-based Industrial Innovation program, or CbI, the Taiwanese government’s response to chips acts around the world. In addition to applying chip-enabled upgrades to traditional industry, it also works on strengthening packaging and design.
Other government efforts to prop up the AI and chip sector come via the Taiwan AI Center of Excellence, which is embedded within the top colleges to address specific national challenges.
Tsinghua’s College of Semiconductor Research takes an interdisciplinary and industry-focused approach, inviting engineers from companies like Micron, which has 10,000 workers in Taiwan, to teach courses on items relevant to their operations.
That leads to a breeding ground for startups and an on-ramp for global investors looking for targets in Taiwan, says C.T. Lin, who runs the universities Operations Center of Industry Collaboration.
“We know what we need … we know what we have, and we bridge the two to create value,” Dr. Lin said, estimating the center earns $20 million per year from 200-plus joint patents.
Walking the floor at Semicon
Can Georgia Capture More Taiwanese Investment?
Longtime investment banker C.Y. Huang believes that tending to the “sacred mountain” of semiconductors is vital, but also that more should be done to diversify and harden Taiwan’s economy. That includes helping smaller Taiwanese firms invest in the United States.
Interviewed by Global Atlanta, Mr. Huang espoused the opposite view of François Chih-chung Wu, the former Taiwanese envoy to France and now deputy foreign minister, who met with visiting journalists over lunch.
The No. 2 diplomat suggested U.S. states focus on landing a big investment from companies like TSMC or Foxconn, winning the inevitable smaller suppliers that would follow.
But Mr. Huang advocates a bottom-up approach that uses educational institutions, partnered with private-sector entities, to re-educate Taiwanese firms on going global, even without the umbrella of these larger manufacturers.
Taiwanese firms, he said, often lack the capacity for “integration” — they are too specialized in specific pieces of the value chain without seeing it as a whole.
Nowhere is this clearer than with Apple’s iPhone, assembled by Taiwan’s Foxconn in huge factories in China and India. Tesla also has utilized more than 20 vital Taiwanese suppliers on its way to becoming the most valuable auto maker in the world. In both cases, the American firm captures more of the value.
“We need to re-learn the soft skills in doing business in the United States, to really understand the culture,” Mr. Huang said. “It’s not just the hardware, not just building of the factory. You need to understand the government, the culture. You need to hire local people, you need to mingle with the local community — these are all the new lessons for Taiwan needs to learn.”
That tracks with a trend Dr. Chieh highlighted at a National Technology Research Council briefing: TSMC’s model depends on contract manufacturing, leaving design to companies like Apple, AMD and Nvidia. But this bargain also means forfeiting brand equity and market value.
“It’s like we are very good at building high rises, but we are not so good as an architect,” he said.
Georgia is “way, way behind” in courting Taiwan for investment, said Mr. Huang, who met with Georgia Department of Economic Development Commissioner Pat Wilson and Southeast Asia Director Stella Xu during the their most recent trip to Taiwan; he came to Georgia himself in July.
Citing the American Institute in Taiwan, the de facto U.S. embassy, Mr. Huang said more than 20 states have beaten Georgia to the punch, many bringing their governors to recruit companies.
For Georgia, Taiwan was largely passed over, literaly, for more than a decade in favor of China, where the state has maintained representation since 2008. Geopolitics has change the equation, so “Georgia needs to be much more aggressive,” he said.
Plus, Mr. Huang believes the state has an unrivaled asset: Georgia Tech, whose alumni association in Taipei has ramped up as interest has grown in Taiwanese investment (and which set up the interview with Mr. Huang).
Working with Georgia Tech’s Taipei-based Asia director Shelton Chan, Mr. Huang has set up the GeoAsia Foundation to bridge Taiwanese and Georgia researchers and companies in critical fields.
François Chih-chung Wu, the former Taiwanese envoy to France and now deputy foreign minister, who met with visiting journalists over lunch.
He says Georgia is better connected to industry than places like California, and thus, better positioned for the revolution in “smart manufacturing” that will come when AI is applied to real-world sectors like robotics and logistics.
Atlanta is also home to a Taipei Economic and Cultural Office headed by newly arrived Director General Jared Lin, crucially in a region that has lacked a Chinese presence since the Houston consulate closed during the first Trump administration.
Mr. Wu, the deputy foreign minister, told Global Atlanta that such free rein in a dynamic region like the Southeast U.S. greatly aids Taiwanese outreach.
“It’s a very clear and cruel reality. If we have an official representation from China, then they will do all they can do to oppose the presence of Taiwan. It’s not easy for us, really. As diplomats of Taiwan, we need to fight every day sometimes, just to have a normal meeting with officials of other countries.”
If Taiwan has its way, that may not be the case anymore in Georgia, and Mr. Lin, the foreign minister, is optimistic about long-term ties with the U.S., aided, of course, by further economic cooperation.
“We also hope that Taiwan the United States can become a joint fleet, and I believe that the tariff issue will be settled someday,” he said in translated remarks. “So we need to take the opportunity to invest in the United States, to develop Taiwan’s semiconductor and AI industries.”
by Trevor Williams
December 16, 2025