Taiwan forges a thicker silicon shield

Quanta Computer

05/06/2026 13:00

The author is a Reuters Breakingviews columnist.  The opinions expressed are her own.
By Robyn Mak

    TAIPEI, June 5 (Reuters Breakingviews) - Tech leaders who gathered this week from over 33 countries in scorching Taipei reaffirmed Taiwan's growing importance in global AI supply chains. Executives led by Nvidia's NVDA.O Jensen Huang and Intel's INTC.O Lip-Bu Tan addressed packed crowds at the Computex show and Nvidia's GPU Technology Conference in the democratically-ruled island that China claims as its own. The latest trends they outlined suggest a strengthening of Taiwan's so-called "silicon shield" and offer President Lai Ching-te a timely opportunity to bolster the island's defenses.
The island's sheer dominance in semiconductor manufacturing, led by the $2 trillion Taiwan Semiconductor Manufacturing 2330.TW, has long been seen as a strategic deterrent against outside military aggression, particularly from China. Of late, though, Taiwan's tech edge appeared to weaken as governments in Washington, Tokyo and elsewhere seek to reshore chipmaking; even TSMC has committed $165 billion to build new factories in the world's largest economy. And U.S. President Donald Trump has also cast fresh uncertainty over Washington's commitment to the island following his visit last month to Beijing.
Yet the messages delivered at the tech confabs ought to quiet any concern about the resilience of Taiwan's silicon shield. In a testament to the island's importance, Huang spent nearly two weeks in what he describes as the "epicentre of the AI revolution". Besides hosting dinners with executives and mingling with locals at night markets, the billionaire also announced his company, which will break ground for its Taiwan headquarters this year, would invest $150 billion annually on the island.
One big emerging theme is the shift from AI running on cloud computing platforms to AI running on local devices. Nvidia on Monday unveiled a new chip for PCs developed with Microsoft MSFT.O that highlights this trend. Demand for laptops and other gadgets should broaden the spoils of the AI boom to more Taiwanese contract manufacturers incuding electronics makers Quanta Computer 2382.TW and Hon Hai Precision 2317.TW, also known as Foxconn. "From design to manufacturing," Intel CEO Lip-Bu Tan proclaimed, "it's all here in Taiwan".
That could turbocharge an economy already set to grow 9.6% this year, per official forecasts. Lai can tap his island's export-led boom to boost defense spending to 5% of GDP by 2030, from the current 3.3%. Last year, his administration proposed a $40 billion special defense budget to buy U.S. arms and locally-made drones, among other things, only to be voted down by the opposition-controlled parliament in May. A strong economy may put Lai on a stronger footing.
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CONTEXT NEWS
The annual Computex trade show was held in Taipei from June 2 to June 5. The exhibition focused on AI, computing, robotics and other technologies attracted 1,500 exhibitors from 33 countries. CEOs from Nvidia, Intel, Qualcomm, Marvell Technology, NXP Semiconductors and other companies delivered speeches.
Nvidia on June 1 unveiled a new chip for laptops and desktop computers known as the RTX Spark that will compete directly against processors from Intel and Advanced Micro Devices.
CEO Jensen Huang, who was in Taipei for both Nvidia's GPU Technology Conference and the Computex trade show, said the new chip developed with Microsoft will "reinvent the PC" for the AI era.

Taiwan exports are primed for another surge https://www.reuters.com/graphics/BRV-BRV/zdpxgldgnvx/chart.png
(Editing by Una Galani; Production by Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on MAK/  robyn.mak@thomsonreuters.com))