September 7, 2026, (Inside AI) — Taiwan used the SEMICON Taiwan trade show to position itself as a democratic and dependable partner for the global AI supply chain. The island signaled openness to sharing its semiconductor wealth with allies while facing pressure to move more chip production to the United States.
President Lai Ching-te spoke at two events on the same day, an unusual move. He said Taiwanese companies were expanding globally to "let resilience create shared prosperity". Lai added that Taiwan's chip strength was built on democracy and the rule of law.
Economy Minister Kung Ming-hsin opened the U.S. pavilion and said Taiwanese firms planned an additional $20 billion of investment in America. That comes on top of TSMC's $265 billion commitment to factories in Arizona.
The push to invest abroad is not purely voluntary. Taiwan struck a deal with Washington earlier this year to increase U.S. investment in exchange for reduced export tariffs. But uncertainty remains. U.S. Commerce Secretary Howard Lutnick told CNBC last week that semiconductor tariffs are coming for companies that do not make chips in the U.S.
Bill Frauenhofer, the Commerce Department official overseeing the tariff agreement, sounded optimistic at the show. He called the Taiwan-U.S. relationship a phenomenal partnership and said both sides have vested interests in making it work.
Manufacturing Shifts Reshape the Taiwanese Model
Taiwanese executives acknowledge that expanding production beyond the island is now unavoidable. Young Liu, chairman of Foxconn and Nvidia's largest AI server maker, said companies must think about how to make with Taiwan, not in Taiwan. He meant manufacturing in the country where the market is.
Tien Wu, chief operating officer of ASE, the world's largest chip packaging and testing provider, agreed during a panel discussion. He said the shift is politically the right thing and that Taiwanese firms have no choice but to do it.
The comments reflect a broader strategic recalibration. Taiwan's diplomatic isolation, driven by Beijing's claim that the island is a Chinese province, has long pushed Taipei to use its tech dominance as a diplomatic tool. Now, that tool is being reshaped by tariff threats and supply chain security demands from allies.
Europe Courts Taiwan With Its Own Chip Ambitions
The European Union is also seeking deeper ties. The bloc sent European Commission official Kilian Gross to SEMICON to pitch the EU's Chips Act 2.0 to Taiwanese officials and companies. Taiwan and the EU have both strongly backed Ukraine and both face trade and diplomatic disputes with China.
Deputy Foreign Minister Francois Wu, one of Taiwan's most prominent diplomats, spoke at the opening of the French pavilion. He said Taiwan and France share the values of democracy, freedom, and a commitment to a rules-based international order.
"We use technology to connect with the world, not to control it," he added.
Taiwan's chip diplomacy is entering a more complex phase. The island must balance U.S. pressure for onshore manufacturing, EU courtship for investment, and Beijing's persistent efforts to isolate it. The SEMICON show made clear that Taiwan's semiconductor strength remains central to its survival strategy, even as the terms of that strength shift.
