Weekly Roundup: TSMC Arizona Plant Delays, Xi's Taiwan Strategy Intensifies, Taiwan-Japan Fisheries Pact Boosts Cooperation
Tech Spotlights
TSMC CEO C.C. Wei said U.S. regulatory hurdles are delaying the Arizona plant, preventing it from adopting the company’s most advanced chip technology ahead of Taiwan. Meanwhile, Samsung is leveraging U.S. Chips Act incentives to produce advanced 2nm and 3nm chips in Texas by 2026, directly competing with TSMC. CCN
Taiwanese HTC announced it will sell part of its extended reality (XR) unit to Google for $250 million, transferring some employees while retaining non-exclusive rights to its intellectual property. The deal, set to close in Q1 2025, aims to accelerate Android XR platform development and strengthen the ecosystem for headsets and glasses. CNA
Winbond Electronics has joined the SEMI Silicon Photonics Industry Alliance, aiming to explore silicon photonics for future AI applications and collaborate with other members. The alliance, led by TSMC, focuses on developing energy-efficient semiconductors and has grown to over 80 members since its launch in September. Taiwan News
Chelpis Quantum Corp. is collaborating with Peter Schwabe of Germany’s Max Planck Institute to develop post-quantum cryptography to counter threats like “harvest now, decrypt later.” Schwabe emphasizes Taiwan’s role as a cryptography hub, leveraging its expertise in secure systems, semiconductor manufacturing, and hardware solutions for quantum-resistant technology. Taiwan News
Politics
Chinese leader Xi Jinping’s focus on Taiwan is driven by operational, political, and psychological motivations, including breaking the first island chain and undermining U.S. influence in Asia. While skeptics cite numerous reasons why an invasion is unlikely, underestimating China’s growing military capabilities and Xi's ambitions poses significant risks, requiring the U.S. to act swiftly to counter potential threats. Real Clear Defense
Taiwan's opposition-controlled parliament approved NT$207.5 billion in budget cuts, reducing the government's proposed NT$3.1 trillion budget for 2025, with significant impacts on defense and other sectors. The DPP criticized the cuts as harmful to governance and security, while opposition leaders framed them as a way to return funds to the public. CNA
Legislative Yuan President Han Kuo-yu attended Donald Trump’s inauguration, leading a bipartisan Taiwanese delegation amid escalating domestic political tensions. The move highlights efforts by President Lai Ching-te to foster dialogue with the opposition despite ongoing clashes over budget cuts and judicial reforms. The Diplomat
Taiwan's Legislature approved a 2025 central government budget of NT$2.92 trillion, with nearly 7% in cuts after heated debates between ruling and opposition lawmakers. The cuts, including significant reductions in defense and energy funding, have drawn criticism from the ruling Democratic Progressive Party (DPP) for potentially disrupting essential government functions. Focus Taiwan
Finance Focus
The Netherlands has exempted ASML’s sales of lithography machines to China from dual-use export laws, enabling $7 billion in exports without disclosing details. While the U.S. pushes for stricter controls, the Dutch government limits restrictions to advanced EUV machines to protect its economic interests. ITdaily
A 6.4 magnitude earthquake struck southern Taiwan near Chiayi, causing minor damage and prompting TSMC to evacuate staff from its central and southern factories, with all reported safe. The quake, which also shook Taipei, caused power outages and building damage in some areas, but no major casualties have been reported so far. Reuters
Gudeng Precision aims to grow its revenue to NT$10 billion in 2025, driven by strong AI demand for wafer delivery pods and advanced packaging technology. Its core wafer pod business, EUV pods, and a growing aviation subsidiary are expected to fuel this 53% growth, following NT$6.55 billion in revenue last year. Taipei Times
Global Focus
The Taiwan-Japan fisheries agreement establishes a shared marine management area near the disputed Senkaku Islands, enabling cooperation on fisheries regulations without addressing sovereignty claims. This collaboration enhances Taiwan's capacity to exercise state power and gain international recognition through resource management and law enforcement. ScienceDirect
Taiwan's Financial Supervisory Commission warned of "new normal" market uncertainty under the Trump administration, citing rising geopolitical risks and potential scrutiny over Taiwan's significant trade surplus with the U.S. Taiwan's 2024 trade surplus with the U.S. surged 83%, driven by high-tech exports, making the U.S. its second-largest trading partner. Reuters
US President-elect Donald Trump and Chinese President Xi Jinping discussed trade, TikTok, and Taiwan in a call marked by optimism but underlined by looming tensions. Trump pledged aggressive tariffs on imports, while Xi emphasized Taiwan's sovereignty and called for mutual respect to foster positive US-China relations. CNA
Taiwan in Numbers
Taiwan's unemployment rate reached a 24-year low of 3.38% in 2024, supported by global investment in AI capacity, according to the Directorate-General of Budget, Accounting and Statistics. The job market remained stable, with significant improvements in first-time jobseekers landing positions and seasonal hiring increases ahead of the Lunar New Year. Taipei Times
The TAIEX soared nearly 30% during the Year of the Dragon, driven primarily by Taiwan Semiconductor Manufacturing Co. (TSMC), whose market capitalization surged by NT$12.68 trillion. The index reached record highs, breaching 20,000 points for the first time, with foreign investment expected to continue bolstering confidence in Taiwan's semiconductor industry. Taipei Times
Taiwan's export orders rose 5.1% year-on-year in 2024 to $589.54 billion, driven by strong demand for AI, high-performance computing, and semiconductor-related goods. Despite the growth, cautious manufacturer sentiment indicates a potential 4-8.1% decline in export orders for January 2025 due to global market uncertainties. Taipei Times
Our Latest Release
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…