Wednesday, May 19, 2021 from 9:00 AM-10:30 AM (ET)
The Global Taiwan Institute (GTI) is pleased to invite you to a virtual discussion on opportunities and challenges in US-Taiwan cooperation in the high-tech supply chain. The semiconductor industry has emerged as a critical component of the new global economy. From electric vehicles, smartphones to sophisticated weapon systems, semiconductor chips increasingly form the backbone of many industries in the rapidly evolving high-tech economy. For Taiwan, this has been mostly a welcome development. Despite its small size and complex geopolitical status, the island democracy has nevertheless carved out a position as a global hub for technological innovation, particularly in the semiconductor sector. Led by cutting-edge firms like TSMC, Taiwan has become an indispensable partner for many countries around the world, including the United States. Now—amid growing international concern over the threats posed by over-dependence on the Chinese tech industry—Taiwan stands to play an even more significant role but also face increased risks as well. This virtual panel will explore opportunities and challenges facing Taiwan and the United States as they work to bolster their cooperation in the high-tech supply chain.
Panelists will include Stephen Ezell, Vice President of Global Innovation Policy at the Information Technology and Innovation Foundation; Rupert Hammond-Chambers, President of the US-Taiwan Business Council; Alexa Lee, Senior Manager of Policy at the Information Technology Industry Council; and Adam Segal, the Ira A. Lipman Chair in Emerging Technologies and National Security and Director of the Digital and Cyberspace Policy Program at the Council on Foreign Relations. The event will be moderated by GTI Executive Director Russell Hsiao.
The event webcast will be broadcast live on our website and YouTube on Wednesday, May 19 at 9 AM (ET). Questions for the author may either be sent by e-mail to firstname.lastname@example.org or through the chat function on the YouTube page.
Stephen Ezell is Vice President of Global Innovation Policy at the Information Technology and Innovation Foundation (ITIF), where he focuses on science and technology policy, international competitiveness, trade, manufacturing, and services issues. Prior to ITIF, he worked at Peer Insight, an innovation research and consulting firm he cofounded in 2003 to study the practice of innovation in service industries. At Peer Insight, Ezell led the Global Service Innovation Consortium, published multiple research papers on service innovation, and researched national service innovation policies being implemented by governments worldwide. Ezell has also worked in the New Service Development group at the NASDAQ Stock Market, where he spearheaded the creation of the NASDAQ Market Intelligence Desk and the NASDAQ Corporate Services Network, services for NASDAQ-listed corporations. Previously, Ezell cofounded two successful innovation ventures, the high-tech services firm Brivo Systems and Lynx Capital, a boutique investment bank. He is the coauthor of “Innovating in a Service-Driven Economy: Insights, Application, and Practice” (Palgrave Macmillan, 2015) and “Innovation Economics: The Race for Global Advantage” (Yale, 2012). Ezell holds a B.S. from the School of Foreign Service at Georgetown University, with an honors certificate from Georgetown’s Landegger International Business Diplomacy program.
Rupert Hammond-Chambers is the President of the US-Taiwan Business Council, where he was elected Vice President in 1998 and President in 2000. Prior to 1994, he served as an Associate for development at the Center for Security Policy, a defense and foreign policy think tank in Washington, D.C. He also serves as a Managing Director at BowerGroup Asia. Hammond-Chambers is an expert on Taiwanese political and economic issues, with a special focus on defense and security. He is also a member of the board of The Project 2049 Institute, a Trustee of Fettes College, and a member of the National Committee on United States-China Relations. He holds a B.A. from Denison University.
Alexa Lee is a Senior Manager of Policy at the Information Technology Industry Council (ITI) focusing on trust and data innovation issues. In this role, she focuses on ITI members’ priorities on cybersecurity, privacy, and innovative technologies. Before joining ITI, Lee received a Prudential fellowship at the Brookings Institute’s Center for East Asia Studies, where she researched and organized policy discussions on China, cross-strait relations, and Asian economy issues. She interned at the US House of Representatives Foreign Affairs Committee where she helped prepare congressional hearings and memos on South China Sea disputes and US-Asia relations. She has also spent a year at the US Chamber of Commerce’s Asia team where she assisted advocacy dialogue on Asia trade and business discussions. Lee is an Associate Editor of the New America/Stanford University DigiChina Initiative, where she contributes analysis on Chinese ICT policies. Lee is also serving as co-chair for the IT Sector Coordinating Council (ITSCC) Botnet Policy Working Group, working closely with the U.S. Department of Homeland Security (DHS). Lee is a Certified Information Privacy Professional (CIPP) recognized by the International Association of Privacy Professionals. Lee holds a Masters in International Economics from Johns Hopkins University School of Advanced International Studies, where she focused on energy and environment policy and Southeast Asia Studies. She is a native of Taiwan and speaks Mandarin, Japanese, and Bahasa Indonesian.
Adam Segal is the Ira A. Lipman Chair in Emerging Technologies and National Security and Director of the Digital and Cyberspace Policy program at the Council on Foreign Relations (CFR). An expert on security issues, technology development, and Chinese domestic and foreign policy, Segal was the Project Director for the CFR-sponsored Independent Task Force reports Innovation and National Security: Keeping Our Edge and Defending an Open, Global, Secure, and Resilient Internet. His book “The Hacked World Order: How Nations Fight, Trade, Maneuver, and Manipulate in the Digital Age” (PublicAffairs, 2016) describes the increasingly contentious geopolitics of cyberspace. His work has appeared in the Financial Times, the New York Times, Foreign Policy, the Wall Street Journal, and Foreign Affairs, among others. He currently writes for the blog “Net Politics.”
Russell Hsiao is the Executive Director of GTI, Senior Fellow at The Jamestown Foundation, and Adjunct Fellow at Pacific Forum. He is a former Penn Kemble Fellow at the National Endowment for Democracy and Visiting Scholar at the University of Tokyo’s Institute for Advanced Studies on Asia. He previously served as a Senior Research Fellow at The Project 2049 Institute and National Security Fellow at the Foundation for Defense of Democracies. Prior to those positions he was the editor of China Brief at The Jamestown Foundation from October 2007- to July 2011 and a Special Associate in the International Cooperation Department at the Taiwan Foundation for Democracy. While in law school, he clerked within the Office of the Chairman at the Federal Communications Commission and the Interagency Trade Enforcement Center at the Office of the U.S. Trade Representative. Hsiao received his J.D. and certificate from the Law and Technology Institute at the Catholic University of America’s Columbus School of Law where he served as the editor-in-chief of the Catholic University’s Journal of Law and Technology. He received a B.A. in international studies from the American University’s School of International Service and the University Honors Program.
On May 19, 2021, the Global Taiwan Institute (GTI) hosted a virtual seminar on opportunities and challenges in US-Taiwan cooperation in the high-tech supply chain. The panel discussion was joined by Alexa Lee, senior manager of policy at the Information Technology Industry Council; Adam Segal, director of the Digital and Cyberspace Policy Program at the Council on Foreign Relations; Stephen Ezell, vice president of Global Innovation Policy at the Information Technology and Innovation Foundation; and Rupert Hammond-Chambers, president of the US-Taiwan Business Council. Panelists analyzed the current state of affairs in US-Taiwan high-tech supply chain cooperation, whilst presenting their views on the future development of such cooperation. The panel, along with the Q&A, were both moderated by Russell Hsiao, executive director of GTI.
Hsiao began with an overview of US-Taiwan tech cooperation, setting the tone by focusing on semiconductors, which, as suggested by Hsiao, are the backbone of high-tech industries. Hsiao emphasized Taiwan’s position as a global hub for the semiconductor industry, with the Taiwan Semiconductor Manufacturing Company (TSMC) being an indispensable manufacturer for many countries, including the US, especially as the latter tries to diversify its supply chains away from China.
Alexa Lee followed by focusing on the strengths and weaknesses of Taiwan’s position in global tech supply chains. Lee highlighted that Taiwan is essential to US national security and economic competitiveness. The recent semiconductor shortage prompted the Biden Administration to incentivize the US semiconductor ecosystem, as seen in the TSMC announcement to build a cutting-edge fab in Arizona. She also discussed Taiwan’s importance to US allies, as many democracies call for greater ICT supply chain cooperation. Lee provided the example of Japan, which has already started to increase its supply chain cooperation with Taiwan. Lee also noted that Taiwan has long been investing in research and development (R&D) and talent training, the latter of which is based on strong public-private cooperation between academia and industry, as seen in the case of the Hsinchu Industrial Park. In terms of challenges, Lee focused again on three areas, namely cyberattacks, talent acquisition and resource scarcity. She pointed out that China has been increasing cyberattacks and attempts to attract Taiwanese talent by offering high salaries, coverage of travel expenses, housing, and other benefits. Lee added that another key factor for the smooth operations of fabs is the availability and stability of resources such as land, power, water, and human capital—but that these are scarce in Taiwan, creating yet another challenge for its chip industry.
Adam Segal focused on the US-China tech war, noting that the United States has four objectives, namely security and resilience of US supply chains, maintenance of the US innovation lead, deceleration of China’s progress in high-tech development, and maintenance of others’ dependance on US supply chains, all whilst increasing US independence from others. Segal mentioned that maintaining a balance between these objectives may be difficult, especially considering the contradictions amongst them. Segal further emphasized the complexity of supply chains, noting that shifting a supply chain is not as easy as policy makers may think. Other countries, including the EU, Republic of Korea (ROK), Japan, and India, are also attempting to influence the global supply chain shifts. Segal therefore proposed pursuing both economic and diplomatic initiatives by working with allies, in order to provide reassurance that the United States is not trying to undermine their technological independence and national security.
Stephen Ezell reiterated the complementarity and deep integration between the US and Taiwanese industries, noting that the United States maintains deeper inter-industry trade with Taiwan than any other East Asian ally. Ezell also noted that Taiwan accounts for 78 percent of the global foundry market, and 92 percent of global semiconductor production at the most sophisticated level of 7nm or less. He noted that Apple accounts for 25 percent of TSMC’s revenue, while Taiwan accounts for 40 percent of US exports in semiconductor manufacturing equipment—which shows the extent of integration between the US and Taiwanese semiconductor industries. In order to further deepen US-Taiwan trade relations, Ezell recommended that the US and Taiwan should join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); complete a free trade agreement (FTA), or at least a smaller agreement similar to the US-Japan Digital Trade Agreement; work together on innovation by establishing an innovation working group within the Economic Prosperity Partnership (EPP) Dialogue; promote integration between the Taiwanese strength in hardware and the US strength in software; increase investment in R&D; promote US-Taiwanese STEM education exchanges—and that the United States should promote Taiwan’s participation in international organizations.
Finally, Rupert Hammond-Chambers analyzed US-Taiwan tech cooperation, stating that in 2017 US-Taiwan relations shifted in a profoundly positive way. First, reshoring accelerated the flows of inbound investment to Taiwan. Second, large companies started the process of internationalization in order to influence the narrative within the global semiconductor industry. TSMC, for example, appointed Peter Cleveland, a former Intel executive, as the company’s global policy vice president. Hammond-Chambers then emphasized that the economic consequences of a potential cross-Strait conflict would not be localized. Instead, they would have global ramifications for manufacturing, which would subsequently affect capital markets. A profound ripple effect throughout the economy would thus be added on top of political and national security implications. In order to further stability and growth in US-Taiwanese relations, Hammond-Chambers suggested that the United States needs a China policy that represents US national interests. Hammond-Chambers also predicted that TSMC will maximize its footprint in Phoenix, which will lead to levelling out of chip production between the US and Taiwan. However, he questioned the possibility of the R&D being levelled out as well, noting the politicization of STEM education as a hinderance to the US ability to offer a base for higher-end R&D. With this, Hsiao turned to audience Q&A.
This summary was written by GTI Summer 2021 Intern Dominika Remzova.
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