Taipei: Taiwan will prioritize the development of silicon photonics by leveraging its strengths in the semiconductor industry to establish another shield to protect the local economy, head of the National Development Council Liu Chin-ching said Wednesday. Speaking at a hearing of the Legislative Yuan’s economics committee, Liu stated that Taiwan already has the artificial intelligence industry as a shield, following the semiconductor industry, to safeguard the nation and is seeking new fields to construct additional economic shields.
According to Focus Taiwan, while Taiwan plans to strengthen its existing shields, the country is determined to focus on potential segments like silicon photonics over the longer term to boost its competitive edge and acquire a larger share of the global market. Silicon photonics involves the use of silicon as a medium for optical transmission, offering features such as low power consumption, extensive transmission distance, and reduced costs. Amid the boom in AI applications, reducing energy consumption has become a priority.
Eyeing participation in the silicon photonics supply chain, contract chipmaker Taiwan Semiconductor Manufacturing Co. and Taiwan-based IC packaging and testing services provider ASE Technology Holding Co. formed the Silicon Photonics Industry Alliance in September 2024. The alliance includes over 30 Taiwanese tech companies. TSMC also partnered with U.S.-based AI chip designer Nvidia Corp. in January for silicon photonics development, although Nvidia founder and chairman Jensen Huang stated that several years are needed to achieve concrete results.
In addition to silicon photonics, Taiwan has identified quantum and autonomous robot development as potential economic shields. Among Taiwan’s tech leaders, Hon Hai Precision Industry Co. has ventured into quantum and robotics development, aiming to transform from a contract manufacturer to a company that integrates hardware and software capabilities.
On Monday, Nvidia announced a partnership with TSMC, Hon Hai, Wistron Corp., and American IC packaging and testing services provider Amkor Technology Inc., along with Taiwanese counterpart Siliconware Precision Industries Co., to establish facilities in the United States for producing the first-ever U.S.-made AI supercomputers. According to Nvidia, the plan is to produce up to $500 billion of AI infrastructure products in the U.S. over the next four years through these manufacturing partnerships.
Liu commented on Nvidia’s move, highlighting the significant business opportunities for Taiwanese companies and the potential for closer business ties between Taiwan and the United States through cooperation. In light of tariff threats from the Trump administration, Liu noted that Taiwanese companies are expected to face challenges, but the government will provide necessary assistance to support their global expansion efforts. He emphasized that the U.S. accounts for 13.4 percent of total imports in the global market, and Taiwan should aim at the remaining 86.6 percent.