Observers say semiconductors are key to plan for US and other countries to restructure the global supply chain and end reliance on China

Tsai tells corporate representatives her government will do its best to provide talent and create an advanced processing centre

Taiwanese President

has vowed to help the island’s key

industry maintain its international lead in an apparent push with the United States and other like-minded countries to restructure the global supply chain and end reliance on mainland China.

The restructuring of supply chains, particularly in the semiconductor sector, was an essential part of discussions between the self-ruled island and a US delegation led by

, who visited Taipei late last week and met Taiwan Semiconductor Manufacturing Company (TSMC) founder Morris Chang.

The idea was first raised by Brent Christensen, the US de facto ambassador to

, late last month during an international investment forum.

Earlier this month, the American Institute in Taiwan (AIT), the US de facto embassy in Taipei, and the Taiwan External Trade Development Council agreed to work closer together

and make it more resilient.

According to the AIT, the partnership will focus on encouraging partners to bring supply chains – for hi-tech and medical sectors in particular – closer to home or place them in like-minded economies, and ensuring that supply chains are secure and free from political coercion.

Tsai met a group of semiconductor company representatives in Taipei, including TSMC chairman Mark Liu, at her office in Taipei on Thursday. She said the island’s chip industry was the key driving force in the industry’s global supply chain.

“We attach great importance to this strategic industry and will actively help the industry to overcome all difficulties so as to maintain the edge of Taiwan’s semiconductor industry, and to accelerate its transformation and development,” she told the group.

Calling semiconductors the key industry among next-generation industries, she said her government would do its best to provide talent for the chip industry and turn the island into the “advanced semiconductor processing centre” to consolidate the island’s chip business supply chain and elevate its status as the leader in global supply chain.

Observers said that by consolidating Taiwan’s semiconductor supply chain, Tsai hoped the island could contribute to the restructuring of the global supply chain proposed by the US to cut off reliance on mainland China as relations worsen between Washington and Beijing.

The administration of US President Donald Trump is embroiled in disputes with Beijing on all fronts, from trade to technology, human rights to diplomacy. It hopes to rebalance economic ties with China, including by executive orders aimed at ensuring the domestic production of key products and using “Buy America” requirements and incentives to persuade US firms to bolster domestic supply chains.

It has demanded that US firms, as well as foreign companies that have acquired US technologies, to refrain from supplying chips for mainland Chinese firms such as Huawei Technologies and forcing TSMC to stop supplying Huawei and build a plant in the US instead.

Beijing, which considers Taiwan its territory subject to eventual union by force if necessary, has lashed out at the US for using the island to work against the mainland and has decried the restructuring of the global supply chain as a US political attempt to decouple the world’s two largest economies that it claimed would never succeed.

Wang Chien-chuan, vice-president of the Taipei-based Chung-Hua Institution for Economic Research, said the US was leading in technology and commercial operations, but was short of manufacturing capacity. “Taiwan can complement the US in the last mile and create a win-win situation for both sides with the aid of innovative technologies,” he said.

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