Why an EU-Taiwan chip foundry deal may not be such a bad thing for Beijing

Any such deal is still a long way off as Taiwan seeks to rally EU support against threats of military action by Beijing while also avoiding EU autonomy in chipmaking

But for Beijing, which frowns on foreign engagement with Taiwan’s government, it might actually be easier to deal with a Europe less dependent on Taiwanese chips

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European Commission Vice-President Margrethe Vestager is seen at a news conference on the European Chips Act, a plan to boost the chip industry in which Taiwan features prominently, in Brussels, Belgium, on February 8. Photo: Reuters

Emanuele Scimia

Emanuele Scimia is an independent journalist and foreign affairs analyst.

Published: 8:15am, 27 Dec 2022

The European Union wants strategic autonomy on microchips, from design to production. But despite its expressed interest in developing economic and technological ties with Taiwan – as seen in the December 18-21 visit by a delegation from the European Parliament’s international trade committee – a deal to build Taiwanese semiconductor plants in Europe is still a long way off.

At the recent Asia-Pacific Economic Cooperation (Apec) summit in Thailand, Taiwan Semiconductor Manufacturing Company (TSMC) founder Morris Chang said the world’s largest contract chip maker was considering building foundries in countries other than the United States and Japan. He did not elaborate, but Europe is seen to be in line to host Taiwanese semiconductor production.

TSMC is spending US$12 billion on chip factories in the US, plus a further commitment for US$28 billion, while the investment in Japan with the Sony group is worth US$2.1 billion.