Taiwanese TSMC’s $100 billion investment in the US is not just about TSMC, it’s about a Semiconductor ecosystem in Taiwan that’s attached to US interests.

Just like the manufacturing ecosystem of China was pushed by the US, the semiconductor ecosystem of Taiwan is also closely connected to US policies and the global trends it ushers.

Since the beginning of this month, geopolitical news has-been dominated by TSMC’s $100 billion investment in the US. Everyone is talking about it–for and against obviously! In Taiwan obviously the DPP led government is for it and the KMT led opposition is leading the against narrative. However there’s a lot more happening. A few concurrent developments require attention here.

Last week, Gudeng Precision Industrial Co, a Taiwanese manufacturing service provider which supplies wafer pods to the world’s leading semiconductor companies including to the TSMC announced plans for a new US supply chain venture to meet the needs and situations created by new US policies.

Above all, Gudeng’s announcement highlights the presence of a local supply chain within Taiwan that complements the global supply chain and that particularly designs itself according to the US market–one of its biggest consumers. Gudeng had last year announced the construction of a plant in Japan to boost supply chain resiliency.

As per the new announcement Gudeng will lead a new alliance of local supply chain players. It is being created with an aim to accelerate supply chain deployment in the US and it is inspired by the new trade and tariff policies in the US. The report in the Taipei Times says that this is being done to cope with “dramatic changes in the geopolitical situation and US President Donald Trump’s trade policies.”

While Gudeng has already created an alliance of eight semiconductor companies two years ago called, TSS Holdings Ltd with focussed operations in the US, the new alliance or venture involving ten companies will be established later this year. These members of the new alliance are already the direct or indirect suppliers to the TSMC.

The industry analysts sitting at Gudeng are planning that much ahead. For sure they are doing so with proper directions from their R&D as well as their market and political analyst in the US.

TAIWAN IS LEARNING FROM UKRAINE

In the last few weeks, the geopolitical developments around the world including the developments between Ukraine and the US created a lot of palpable tension in Taiwan. Its limited English media was full of news and op-eds about how the developments in Europe impact Taiwan, what Taiwan can learn and what it should do. Political critics were talking if Trump can be trusted to protect Taiwan?

Interestingly for Taiwan’s business community, learning from Ukraine’s situation isn’t just limited to rhetoric and passive tension. Taiwan is already planning for the “China contingency” and is learning about it from Ukraine.

The Taipei Times quoted a government source on March 6 about how the Taiwanese companies are learning from Ukrainian companies that continue to operate despite the war with Russia.

“We hope to learn from Ukraine’s first-hand experiences — how private companies helped build the resilience of its government and society during wartime,”  a senior Taiwan security official told the Taipei Times.

WE CAN LEARN MUCH!

This attitude shows how Taiwan constantly adapts, plans and operates under war shadows. Despite all the threats, cyberattacks, espionage threats, geopolitical tensions etc. its economy including its semiconductor ecosystem is constantly growing and is the most resilient factor of its national security.

There’s nothing that comes in a perfect package–situations constantly change calling for constant learning and adaptation.

There’s a lot that India can learn from Taiwan in this context of the Gudeng announcement and Taiwan China contingency plans–however the most important learning could be how efficiently and speedily the Taiwanese economy and industry respond to the crisis. How they think ahead of time and probably that’s why their SME (Small and Medium Enterprise) based semiconductor ecosystem is the best in the world. There’s a lot that India can learn for its SMEs from Taiwan.

To every Chinese intimidation the Taiwanese don’t just have an emotional response but an actual industrial plan. That’s how they have evolved and survived in the past few decades. They have constantly lived under the shadows of being gulped by the entity across the strait–and under this pressure they have become master planners, engineers and business negotiators with foresight.

However semiconductors dominating their national security narrative wouldn’t suffice alone in the long run. Maybe that’s why their polity is debating fiercely these days about their defense budget. They have just released 17 strategies to counter Chinese infiltration into their defense and civil systems.

To an Indian sitting in Taiwan in 2025, Taipei appears dramatically interesting not because of the common China crisis we face but because of the psychological character and business operational might, that the economy of this small demography of 23 million people reflects.

Like a Taiwanese source told me early this year, “Engage and Negotiate just like in a wrestling match.” The Taiwanese appear to be good wrestlers.

(Venus Upadhayaya is a MOFA Taiwan 2025 Fellow from India. Media and Journalism, Global South Geopolitics and Sustainability and Leadership are her areas of interest.)