“Nobody thinks Taiwan is going to become the only source of systems software, but it can be a hub that works with different players and shows emerging markets in particular how technologies can be better designed,” says Nelson. “And it’s not just in healthcare, the high-tech sector, banking, and e-government applications – it’s also in agriculture, food production, and retail.”
Nelson says that rather than providing a long list of detailed requirements, the government should form a cybersecurity framework that focuses on goals and milestones without stipulating how they should be achieved. “You want to focus on the results, not the mechanism.”
China threat misconception
Supply chain cooperation between the U.S. and Taiwan is vital for the economic security of both, and collaboration has only strengthened with the increased attention to the importance of ICT products and semiconductor chips. The commitment of both sides to cooperate on related issues was reasserted in late 2021 when Taiwan and the U.S. established the Technology Trade and Investment Collaboration (TTIC), a new bilateral cooperation framework meant to develop commercial programs and strengthen critical technology supply chains.
TTIC is the latest addition to the two parties’ already established communication channels on economic issues, which also consist of the Trade and Investment Framework Agreement (TIFA) and the U.S.-Taiwan Economic Prosperity Partnership Dialogue. It is seen as a way for the U.S. to strengthen its role in the semiconductor industry and reiterate the importance of the bilateral U.S.-Taiwan commercial and investment relationship.
Such collaborative activity might not be enough, however. Convincing more American companies to include Taiwan in their supply chains will require creating greater confidence in Taiwan’s production stability and its government’s capability in data management and protection, says Nelson. Companies will also need assurance that they will not be affected by geopolitical maneuvering.
“If companies worry that their supply chain is going to be disrupted for geopolitical reasons, then they’re less inclined to work with companies in those countries.”
Recognizing these concerns, Minister Deng emphasized Taiwan’s trustworthiness and reliability during his opening statement at the U.S.-Taiwan supply chain seminar. Deng declared to the audience that Taiwan is a safe and reliable partner, and that it “actively maintains supply chain security” and has “never coerced any other countries with economic means.”
But to assure businesses that Taiwan will remain a stable partner, the island will need to assuage fears of potential military conflict. Hammond-Chambers notes that although many experts agree that China is unlikely to launch a military attack on Taiwan in the near future, media and think tank preoccupation with possible future scenarios could trickle into boardrooms and influence business decisions.
“They see what’s happening in Ukraine, and it’s easy for people to jump to conclusions about Taiwan,” he says. “Future global supply chains are likely to evolve into a red [Chinese] supply chain and alternate supply chains that include Southeast Asia on a grander scale. Whether companies’ attempts to ‘China-proof’ their businesses will result in an exclusion of Taiwan remains to be seen.”