U.S. firms in Taiwan forge local partnerships to navigate geopolitical and supply-chain risks

According to the American Chamber of Commerce in Taipei, investments from the United States in Taiwan surged to $932 million last year, marking the highest single-year total since 2008.

Investments from the United States in Taiwan witnessed a substantial increase, reaching $932 million in the past year, marking a significant rise from $398 million in 2022. This surge in investment, the highest single-year total since 2008, is attributed to American companies strategically forming partnerships with Taiwanese firms. The move is seen as a response to both geopolitical tensions and global supply-chain shifts.

American firms with headquarters in the United States are actively engaging with Taiwanese partners to diversify their supply chains and reduce dependence on a single source or region, according to Patrick Lin, President of the American Chamber of Commerce in Taipei (AmCham Taiwan). Taiwan, renowned as a global source of high-tech components, has faced challenges amid the ongoing geopolitical disputes between China and the United States, both major consumers of Taiwanese exports.

The strategic partnerships with Taiwanese suppliers and manufacturers allow American companies to secure a stable supply of critical components, enabling them to navigate potential disruptions in the global supply chain. These disruptions have been exacerbated by the COVID-19 pandemic and the ongoing geopolitical tensions, including the trade disputes between the U.S. and China.

Global shipping slowdowns and mainland China lockdowns in 2022, coupled with the re-routing of tech supply chains amid the U.S.-China trade dispute since 2018, have highlighted the need for diversified and resilient supply chain strategies. Taiwan, a key player in the semiconductor industry, supplies approximately 60% of the world’s semiconductor chips, making it a crucial hub in global manufacturing supply chains for various tech products.

While Taiwan’s geopolitical status remains a point of contention, with China claiming it as part of its territory, American businesses are proactively embracing local partnerships to mitigate risks and enhance supply chain resilience. The increasing investments from the United States in Taiwan reflect a recognition of the island’s strategic importance in the global technology landscape and the efforts of American companies to secure their supply chains amidst complex geopolitical dynamics.