Taiwan and Arizona seek to establish a platform for broad cooperation in high-tech manufacturing [Image: ranjatm / pixabay]

Taiwan and Arizona Enhance Cooperation in Semiconductor Manufacturing

Taiwan

On August 24, 2021, the Greater Phoenix Economic Council (GPEC) announced it had signed a Memorandum of Understanding with the Taiwan-USA Industrial Cooperation Promotion Office, a unit of Taiwan’s Ministry of Economic Affairs, to enhance cooperation in high-tech manufacturing. The agreement, signed at the 2021 Taiwan-Arizona Forum on Industrial Cooperation & Business Opportunities, aims to develop the greater Phoenix area into a proper semiconductor hub amid tight bilateral cooperation with one of the world’s leading chip powerhouses. Chris Camacho, President and CEO of GPEC, said in a statement he hopes the deal will serve as a springboard for collaboration in other sectors, such as biomedical devices, and will entice further foreign investment in the area.

The MoU is just the latest investment Taiwan has made in Arizona’s chip manufacturing sector. In June, the world’s largest manufacturer of semiconductors on contract, Taiwan Semiconductor Manufacturing Co (TSMC), began construction of a $12 billion computer chip factory in Arizona. As these partnerships bring Taiwanese workers and neighbors to Arizona, GPEC is working with schools and local governments to ease relocation. The 2020 US Census revealed that Phoenix is the United States’ fastest-growing large city, confirming the city’s linkages made with Taiwan now will continue to have impacts on the lives of an increasing number of Americans in the future. Still, Taiwan is interested in broad geographic partnerships with the United States; another Taiwanese manufacturing giant, GlobalWafers, signed an $800 million agreement to expand the production of semiconductor components in Missouri.

Taiwan accounts for 63% of the global semiconductor market share. The industry is essential to the island’s trade, identity as an advanced economy, engagement with regional partners, and economic balancing between the United States and China. Taiwan’s eagerness to invest in the United States through this crucial industry is indicative of the trust it has in the United States as a partner and in the stability of bilateral ties. The move also works to develop an American link in a vulnerable supply chain already disrupted by the COVID-19 pandemic and US-China trade war. Further, it will allow American companies that rely on Taiwanese chips, like Apple and Qualcomm, to reduce their dependency on overseas factories without impacting bilateral trade.

The memorandum seeks to make good on the 40-year-old sister city agreement between Taiwan and Arizona’s capitals. The Taiwanese Ministry of Foreign Affairs reported in Taiwan Today that “the two sides can expect to capture a significant portion of the market and shape the future industrial landscape”. Chris Comacho is similarly optimistic, emphasizing his organization’s desire to “fortify Arizona’s position as a top semiconductor hub in the United States”. Through this platform of continued industrial cooperation, Taiwan and Arizona appear poised to thrive in the crucial sectors of today and tomorrow.

Chris Cooper is a participant in the Young Professionals program at the East-West Center in Washington. He is a recent graduate of the University of California, Berkeley with a B.A. in Political Science.