Taipei: Taiwan should avoid becoming overly dependent on semiconductors and preserve resources for other industries while expanding chip production with trusted overseas partners, a U.S. scholar said Thursday. Glenn D. Tiffert, distinguished research fellow and co-chair of the Program on the U.S., China, and the World at Stanford University's Hoover Institution, made these remarks during a panel discussion on trusted supply chains at a forum hosted by the Research Institute for Democracy, Society and Emerging Technology (DSET) and SEMI in Taipei.

According to Focus Taiwan, Tiffert emphasized the importance of diversifying Taiwan's economy to prevent over-reliance on the semiconductor industry, drawing parallels to Detroit's historical dependence on the automobile industry. He noted that the semiconductor industry, while beneficial, presents a risk if it becomes Taiwan's sole economic focus. Tiffert pointed out that the industry's rapid expansion is already outpacing the country's supply of engineers, exacerbated by demographic challenges.

Tiffert suggested that government policy could play a crucial role in encouraging economic diversification, allowing Taiwan to explore other sectors such as robotics and biotechnology. He advocated for international cooperation, particularly with Japan, Europe, and the United States, to distribute semiconductor production more evenly without weakening Taiwan's strategic position. Citing TSMC's operations in Arizona, he highlighted the mutual benefits of such partnerships, noting that they enhance manufacturing capabilities and profitability.

The panel, moderated by DSET CEO Jeremy Chang, explored how countries with shared values can fortify semiconductor supply chain resilience while maintaining an international division of labor. Tiffert argued against complete decoupling, suggesting that establishing redundant capacity could safeguard against disruptions. He acknowledged that consumers might bear additional costs, but considered this spending as essential insurance against potential future challenges.

Emiko Higashi, a Kioxia board member and member of Japan's Industrial Policy Council, remarked that government subsidies alone cannot sustain semiconductor projects, citing Rapidus' collaboration with IBM as a successful example of leveraging U.S. research with Japanese manufacturing prowess. Meanwhile, Marc Hijink from Dutch newspaper NRC cautioned that stricter export restrictions could benefit Chinese competitors, particularly in less advanced lithography systems.

Asserting the need for coordinated redundancy, Tiffert concluded that allies should maintain some domestic capacity while specializing in their strongest areas. He argued that such strategies enhance rather than diminish national sovereignty, reinforcing the importance of strategic international collaboration in the semiconductor industry.