The U.S.-China competition has now fully expanded into the technology sector, with profound implications for global supply chains. According to Fu-Kuo Chung, an analyst at the First Research Division of the Chung-Hua Institution for Economic Research (CIER), China is adopting a dual-track strategy of “curving” and “changing lanes” in response to U.S. technological blockades. The country is focusing on developing mature process technology and is projected to surpass Taiwan as the world’s largest producer of mature-node semiconductors by 2027. China is also leveraging platforms such as the BRICS and the Shanghai Cooperation Organization to enhance its technological independence and geopolitical influence.
Hsien-Ming Lien, President of the CIER, emphasized that the U.S. and China will remain in a state of competition for the next decade. The Trump administration is pushing to bring manufacturing back to the U.S., while China is accelerating breakthroughs in areas such as electric vehicles, drones, and AI—intensifying the rivalry between the two powers. Although Taiwan’s scale is limited, its critical manufacturing capabilities and geopolitical strategic value cannot be overlooked. Taiwan must incorporate geopolitical considerations when formulating technology policies, as its choices will significantly impact the global balance of the supply chain.
Meanwhile, emerging technologies have become a focal point of global competition. Chen-Chun Lin, an analyst at the Second Research Division of CIER, noted that silicon photonics is now regarded as a critical enabling technology for AI and high-performance computing thanks to its advantages in high-speed transmission and low power consumption. In the future, silicon photonics is expected to expand into various applications, including network communications, biomedical sensing, and autonomous driving. Among these, “optical communications” has the most immediate potential for commercialization. The United States has significantly increased its investment in silicon photonics research in recent years, particularly in the areas of “quantum photonics” and “data center optical interconnects,” to meet the enormous computational demands driven by AI.
Analyst Chen-Chun Lin believes that while Taiwan is not a primary driver of cutting-edge silicon photonics technology, it possesses a mature and comprehensive network equipment supply chain. If silicon photonics can drive the advancement of optical communications, Taiwanese companies are well-positioned to enter the market early and establish a strategic foothold as global applications expand.
Author: CIER Editorial Team
Date: September 24, 2025