TSMC’s investment in Europe has the potential to strengthen Taiwan-EU ties and promote semiconductor cooperation between the two regions. Taiwan Economy Minister Wang Mei-hua expressed her belief that this move would foster closer collaboration between Taiwan and the EU. Drawing a parallel with Taiwan’s growing partnership with the United States, Minister Wang highlighted the positive impact of initiatives such as the ’21st Century’ trade pact and double tax avoidance. The development of TSMC’s presence in Europe is expected to pave the way for enhanced bilateral relations in the future, in a manner similar to the recently signed trade agreement with the U.S.
While acknowledging that TSMC’s decision to invest in Europe is solely a business choice, Taiwanese officials have stressed the importance for European countries to strengthen ties with Taiwan if they wish to continue benefiting from semiconductor cooperation. Taiwan has consistently called for progress on a Bilateral Investment Agreement (BIA) with the European Union since its inclusion on the EU’s list of trade partners in 2015. However, formal discussions on this matter have not yet taken place.
A BIA would carry significant political weight for Taiwan, given its diplomatic isolation and limited participation in global organizations and agreements, despite being a member of the World Trade Organization. The approval for TSMC’s investment in Germany lies with Taiwan’s economy ministry, which will consider the company’s domestic commitments before making a decision. Minister Wang highlighted that the approval process is likely to proceed smoothly, as the German facility will focus on manufacturing less advanced chips for the automotive industry, rather than high-end, more profitable chips for applications like artificial intelligence.
Concerns have been raised in Taiwan about a potential trend among chip companies of shifting their operations overseas, which may have negative implications for the country’s semiconductor industry—an economic pillar. However, Minister Wang reiterated that TSMC has reassured Taiwan that its most advanced manufacturing and research will remain rooted in the country. The company’s expansion abroad, including the establishment of new factories in the United States and Japan, is driven by a global trend of bolstering supply chain resilience.
As TSMC expands its overseas presence, freeing up capacity in Taiwan for the production of more valuable chips, it underscores the importance of Taiwan remaining at the forefront of the semiconductor industry. While TSMC’s investments abroad may symbolize a shift, they ultimately contribute to global efforts to strengthen supply chain resilience. By maintaining its position as a leader in advanced manufacturing and research, Taiwan can continue to play a crucial role in the global semiconductor landscape.
In conclusion, TSMC’s investment in Europe signifies a significant opportunity to strengthen Taiwan-EU ties and facilitate closer semiconductor cooperation. The Taiwanese government has emphasized the need for European countries to foster stronger connections with Taiwan to maintain and enhance semiconductor collaboration. The approval for TSMC’s investment in Germany is expected to progress smoothly, given that the facility will focus on producing less advanced chips for the automotive industry. While concerns have been raised about companies moving their operations overseas, TSMC has reaffirmed its commitment to Taiwan’s semiconductor industry, ensuring that its advanced manufacturing and research will remain rooted in the country. This overseas expansion aligns with the global trend of reinforcing supply chain resilience. By retaining its leadership in the semiconductor sector, Taiwan can continue to make a significant impact on the industry’s development and growth.
