06/09/2022, 14.28
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Microchip cooperation between the EU and Taiwan still stalled

by Emanuele Scimia

Taiwan’s giant TSMC has no plans to open factories in Europe. The EU’s semiconductor dialogue with Taiwan risks undermining relations with China. Slovak parliamentarian feels his country and Taiwan might be interested in manufacturing chips in Slovakia. In Europe, more and more voices are calling for EU members to leave the China-led 16+1 forum.

Rome (AsiaNews) – Technological cooperation between the European Union and Taiwan is struggling to take off, this despite recent mutual outreach.

Yesterday, the Taiwan Semiconductor Manufacturing Company Ltd (TSMC), the world's leading contract chipmaker, said it had no plans to set up factories in Europe.

More than Russia’s invasion of Ukraine and fears that China may do the same with Taiwan, microchips have prompted the European Union to engage in dialogue with the Taiwanese, even at the cost of jeopardising relations with Beijing.

With its European Chips Act, announced in February, the EU plans to raise €43 billion (US$ 46.1 billion) in public and private investments to meet any future supply chain disruptions.

Microchips, especially the most advanced manufactured by the Taiwanese, are essential components in every product with high technological content.

Since 2020, semiconductors shortages due to high demand for technological equipment generated by the pandemic have created problems for the production of many goods, such as cars.

In recent months, the EU has tried to encourage Taiwanese companies to manufacture directly in Europe. However, TSMC president Mark Liu said the company does not yet have enough buyers in the Old Continent to justify such an investment.

Germany is one of the countries suggested as a possible host for TSMC production. In March, the Taiwanese Foreign Ministry also sent experts to Lithuania, Czechia, and Slovakia to assess the potential of local high-tech industries.

Still, Taiwanese microchip production in the EU remains a very distant possibility, as evinced by the annual EU-Taiwan Trade and Investment Dialogue (TID) held on 2 June. In its final communiqué, the EU said the two sides were ready to work together to monitor the semiconductor supply chain.

The result certainly falls short of expectations, especially taking into account that TSMC is spending US$ 12 billion on chip factories in the United States and is building a semiconductor foundry in Japan with the Sony group.

Peter Osuský, chairman of the Slovakia-Taiwan Parliamentary Group, indirectly confirms Taiwan's current reluctance to invest in European microchip production. The lawmaker is currently in Taiwan with an official Slovak delegation.

On the possibility that Bratislava and Taipei are discussing possible chip investments in Slovakia, Osuský told AsiaNews that the Slovak Ministry of Economy "is ready to support the necessary steps", adding that he has “the feeling that both sides are interested”.

With its rapprochement with Taiwan, the EU is putting strains on its relationship with China. For Beijing, the island is a "rebel province" to be taken even with the use of force if necessary.

In a recent interview with Nikkei Asia, Lithuanian Foreign Minister Gabrielius Landsbergis called on the 11 EU countries that are members of the China-Central and Eastern European Countries (China-CEE or China-CEEC) group to leave it.

Also known informally as the 16+1 group (17+1 until Lithuania left it in May 2021), it brings together China and 16 central, eastern and southeastern European countries.

The CEE has long been in the crosshairs of the EU, which considers it a tool of China to divide the EU, pushing some member states to align themselves with Chinese positions.

According to Landsbergis, the Beijing-led forum did not bring any benefit to its European members, a view recently shared by his Czech counterpart Jan Lipavský.

Osuský is on the same page. He believes that Slovakia should gradually reduce its involvement with the 16+1 group and eventually leave it altogether.



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