Taiwan Hebdo no. 23-2024 | China Policy Observatory [OPCh]

Featured topic of the week

In an interview with Reuters, Taiwanese chipmaker TSMC announced it had held talks with some customers, including Nvidia and Apple, about moving its factories off the island as tensions in the Taiwan Strait escalated. However, such measures would be impossible. Tensions between China and Taiwan have escalated sharply after Lai Ching-te was sworn in as Taiwan’s president and Beijing launched war games around the island.

President CC Wei told reporters that “instability in the Taiwan Strait is a consideration for the supply chain, but I want to say that we certainly don’t want wars to happen.” He said it would be impossible to move chip factories off the island, given that 80 to 90% of their production capacity is in Taiwan.

Despite tensions with China, The topic of a possible war and its impact on chip supply chains has barely appeared at the annual Computex technology fair this week in Taipei. “No one is worried about this yet,” Frank Huang, president of Powerchip Semiconductor Manufacturing, told reporters at the event. “I think, of course, there is always military activity, or clashes, but again Taiwan is very important for AI, even the Chinese know that. “We are fine, there is no problem,” Huang said.

Context observations

• President Lai Ching-te met with President of the International Peace Foundation Uwe Morawetz. The president thanked IPF for choosing Taiwan as its next Bridge project, which plans to invite six Nobel laureates in physics, medicine, chemistry and economics to visit Taiwan starting next year. Lai believes the project would benefit Taiwanese students and deepen Taiwan’s international connections and enhance its global influence.
• The former deputy national security advisor of the United States United, Matt Pottinger said that a conflict in the Taiwan Strait can be avoided. In an interview Pottinger said he was “quite optimistic” that a conflict with China could be deterred, but that It meant that the United States should work with Taiwan and Japan to increase munitions production and boost investment in the industry..
• President Lai Ching-te highlighted the arduous process of democratization on the 35th anniversary of the June 4 Tiananmen Square protest. In a Facebook post, Lai said “we will continue to keep this historical memory alive.” For her part, The Continental Affairs Council (MAC) called on Beijing to “have the courage to face the historical facts of the June 4 Incident.””. He also urged the Chinese Communist Party to promote “a comprehensive deepening of reforms” and “let people live better.”
• President Lai Ching-te on Wednesday congratulated Indian Prime Minister Narendra Modi on his election victory. The Taiwanese Ministry of Foreign Affairs issued a statement congratulating the Indian government and its people on the completion of the elections. The ministry described Taiwan and India as “key members” of the Indo-Pacific region. In response, Indian Prime Minister Narendra Modi said yesterday that he looks forward to closer ties with Taiwan.
• US President Joe Biden said he does not rule out the possibility of using military force to defend Taiwan if China unilaterally tries to change the status quo in the Taiwan Strait.. In an interview with Time magazine published Tuesday, Biden said he has made it clear to Chinese President Xi Jinping that the United States will not seek Taiwan independence as it had agreed with Beijing.
• The Cabinet said on Thursday (June 6) that it will try to overturn the legislative reform package approved by opposition parties in the Legislative Yuan. The experts discussed the possibility of revoking the measures with cabinet officials on Wednesday, June 5 until midnight, Radio Taiwan International reported.

Relevant data

• Nvidia CEO Jensen Huang announced that his company will build a large design center in Taiwan within five years that will employ at least a thousand engineers, according to CNA. He said Nvidia is looking for a large site to build the center, but the location has not yet been decided.
• Trade union organizations asked the government to maintain labor insurance payments if changes are made to the system in the reforms. They said that the data from the Ministry of Finance They suggested that the low tax rate of 14.6% for the entire country meant that the government could tax the rich and large companies more.
• Taiwan’s investments in New Southbound Policy nations increased 92.1% to $2.71 billion during the first quarter of 2024 from the same period last year. The government approved or verified 80 investment cases between January and March, most of them targeting Singapore, Vietnam and Thailand. Trade between both parties during the first quarter amounted to 42 billion dollars, 11.9% more than during January-March 2023.

Relevant names

CC Wei He is currently CEO and Chairman of the Board of Directors of TSMC

Lai Ching-te (賴清德), Taiwanese politician and doctor who is the current president of the Republic of China.

Jensen Huang, (黃仁勳) is an entrepreneur, electrical engineer and co-founder, president and CEO of Nvidia

This number was documented by Arturo Cantor Tepal.