Weekly Roundup: Taiwan Launches Silicon Valley Hub, Defense Ministry Defends Submarine Budget, NT Dollar Emerges as Asia's Top Carry-Trade Currency
Tech Spotlights
Taiwan's NTNU, in collaboration with Caltech, developed a 0.65 nm thin quantum memory material to improve quantum computing performance and scalability. The breakthrough, published in Advanced Materials, aligns with Taiwan's NT$8 billion investment in quantum technology and builds on its first domestically-built 5-qubit quantum computer. Taiwan News
TSMC plans to produce chips for crypto mining firm Bitdeer at its Arizona fab, raising scrutiny due to Bitdeer’s ties to China's Bitmain and past controversies involving Huawei-linked entities. While TSMC emphasizes compliance with U.S. export rules, concerns persist about geopolitical risks as it navigates complex U.S.-China trade tensions. Culpium
Nvidia CEO Jensen Huang clarified that demand for TSMC's advanced packaging remains strong but is shifting from CoWoS-S to CoWoS-L for its new Blackwell chips. While capacity constraints persist, Huang noted that advanced packaging capacity has quadrupled in the past two years, ensuring continued production growth. Reuters
Taiwan launched the "Startup Island TAIWAN Silicon Valley hub" in Palo Alto to boost global visibility for Taiwanese tech startups. The hub focuses on semiconductors and AI, aiming to nurture over 100 startups, attract 2,000 talents back to Taiwan, and strengthen Taiwan-U.S. tech ties. Focus Taiwan
Politics
Taiwan's Defense Ministry denied claims that NT$1.8 billion of the Indigenous Defense Submarine (IDS) Program budget was frozen, emphasizing the "Hai Kun" submarine prototype remains on schedule. The overall 2025 defense budget faces a 3% cut, with NT$170.1 billion allocated for essential military equipment and facilities. RTI
Taiwan's intelligence agency reports a sharp rise in espionage cases, with China using gangs, shell companies, and coercion to gather military intelligence. Nearly half of the 64 alleged spies tried last year were current or retired military personnel, reflecting intensified Chinese "grey area" tactics. CNA
Taiwan's Ministry of the Environment will invest NT$6.1 billion to develop four satellites for air pollution and greenhouse gas monitoring, with the first launch planned for 2029. Using satellite data, AI, and drone sampling, the initiative aims to track pollutants from China and Southeast Asia and analyze greenhouse gas emissions. Taiwan News
Taiwan revoked a citizen's household registration and is investigating 12 others for possibly holding Chinese identity cards. Authorities warned that obtaining Chinese passports may result in losing Taiwanese citizenship. Taiwan News
Finance Focus
The New Taiwan dollar is emerging as Asia's top carry-trade currency due to its stability and lower intervention risks compared to the yuan. Analysts highlight Taiwan's strong economic fundamentals and export-driven resilience, making it an attractive alternative amid Chinese currency volatility. Taipei Times
Taiwan's Fair Trade Commission approved AMD's $4.9 billion acquisition of server maker ZT Systems, stating it would not restrict market competition. AMD aims to strengthen its AI hardware portfolio, with CEO Lisa Su emphasizing AI systems as a top strategic priority. Taiwan News
An AmCham Taiwan survey shows 80% of businesses are confident in Taiwan's business climate, with 90% planning to maintain or increase investment. Key concerns include low salaries, road safety, and Taiwan Strait tensions, while strong support exists for a Taiwan-US double tax avoidance agreement to boost trade and economic ties. Taiwan News
Global Focus
China has intensified its aggressive South China Sea tactics, targeting the Philippines with maritime occupations and "gray-zone" maneuvers. The incoming Trump administration faces pressure to counter these actions with bold initiatives, such as partnering with Manila on resource exploration and strengthening U.S.-Philippine defense cooperation. The Dispatch
Chinese Ambassador Xiao Qian's claims misrepresent Taiwan's status and Australia's "One China policy," advancing Beijing's narrative while distorting international law and bilateral differences. Such rhetoric undermines informed discourse and stable relations. AFR
Taiwan will enhance surveillance of ships with flags of convenience after a Chinese-linked vessel allegedly damaged an undersea cable, escalating concerns over "grey zone" tactics. The government plans stricter port inspections, coast guard interventions near cable zones, and increased intelligence sharing with the U.S. and Europe. Reuters
Taiwan in Numbers
TSMC posted record quarterly profits and expects strong revenue growth in early 2025, driven by rising AI chip demand. CEO C.C. Wei expressed confidence in managing U.S. export controls on AI technology to China and emphasized ongoing discussions with the current and incoming U.S. administrations. Reuters
Taiwan's economy is forecast to grow 3.22% in 2025, down from 2024's 4.3%, amid uncertainty over U.S. President-elect Donald Trump's policies. Growth will be fueled by AI demand, investments, and exports, despite potential risks from trade restrictions. Focus Taiwan
Taiwan's 2024 tax revenue rose 7.9% to NT$3.73 trillion, surpassing the budget by NT$497.2 billion, driven by AI-driven stock activity, a strong housing market, and gains in personal and business taxes. Taipei Times
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Morris Chang: The Visionary Behind TSMC
Morris Chang, the founder of Taiwan Semiconductor Manufacturing Company (TSMC), shares his insights and life story in the highly anticipated second volume of his autobiography. This latest release revisits Chang’s remarkable journey, from his early days at Texas Instruments to his pioneering work at TSMC, solidifying his role as a key figure in the semi…