Taiwan plays a vital role in the global supply chain, producing manufactured products ranging from textiles and garments to technology products, including semiconductors, doing so in numerous Taiwan-invested manufacturing facilities around the world. Under growing tensions between major countries and the COVID-19 pandemic, which have led to supply-chain restructuring, Taiwanese companies have considered, or have already, adopted a different investment strategy in China. In 2022, Taiwan’s latest investment flows in China dropped to less than 40 percent of its global outbound investment, demonstrating a strategy of decentralization and relocation from China. The past five years have also witnessed a significant growth in Taiwan investment flows into Southeast Asia and the U.S. Under the changing external environment and a diversification strategy, TSMC, the world’s largest semiconductor manufacturer, announced an investment plan in Arizona, which will begin production of 4-nanometer process technology in 2024. TSMC also announced investment plans in Fukumoto, Japan, and in August 2023, a joint venture in Dresden, Germany. These moves are in response to the national strategy of the U.S., the EU and Japan, and will help those countries secure access to semiconductors in the event of disruptions in the supply chain. Taiwan needs to collaborate with its like[1]minded partners to address various challenges; it therefore needs to be invited to join the supply chain networks proposed by major countries.

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