Taiwan Bolsters 'Chip Diplomacy' With Canada And France Amid China Tensions

In a move to bolster its global standing, Taiwan has extended its ‘chip diplomacy’ to the Czech Republic, signing a tech pact with the U.S., Canada, France, and Germany in recent months.

What Happened: The National Science and Technology Council (NSTC) of Taiwan has inked two significant tech deals in the past week, reported Bloomberg.

The first deal is a science, technology, and innovation agreement with Canada, aimed at jointly nurturing talent. The second involves the establishment of an office in Prague to support the development of Czech chip design engineers.

This initiative is part of Taiwan’s broader strategy to leverage its position as a global leader in chip manufacturing to enhance its international presence. The move is particularly significant given China’s strong opposition to formal exchanges between Taiwan and other nations.

"The situation of Taiwan was very difficult in the past, but in recent years we're getting better and better because a lot of countries discover the existence of Taiwan mostly because of semiconductors," NSTC Minister Wu Tsung-Tsong said, according to the report.

Despite China’s claims on Taiwan, the island has emerged as a key player in advanced electronics engineering, with Taiwan Semiconductor TSM  rising to become Asia’s most valuable company.

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Several nations, including Japan and the U.S., have taken steps to encourage the export of Taiwan’s chip production and expertise. The U.S., for instance, has allocated $11.6 billion for a major TSMC project in Arizona.

France and Germany have also signed science and technology cooperation agreements with Taiwan, with Germany planning to host a TSMC facility. The Czech Republic and France are also looking to capitalize on TSMC’s growing presence in Europe.

Why It Matters: Taiwan’s semiconductor industry has been experiencing significant growth, driven by factors such as the AI boom and U.S. expansion. Key Taiwanese contract chipmaker TSMC expects to report a 5% rise in first-quarter profit on Thursday backed by robust demand.

This growth has also impacted Taiwan’s export market, with the U.S. overtaking China as Taiwan’s biggest export market for the first time in over 20 years.

Despite challenges such as a recent earthquake, Taiwan Semiconductor has been identified as one of the best pick-and-shovel stories in the industry, with the potential to recover lost sales and maintain its strong position.

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