Recent public statements by U.S. officials have directly linked "protecting Taiwan's security" with investment scale and production capacity allocation. While such rhetoric may seem familiar in diplomatic contexts, when examined through the lens of international political economy and industrial policy, the underlyinglogic of the policy warrants serious scrutiny from Taiwanese society.
When security commitments are articulated through conditional language, their nature shifts from long-term institutional arrangements based on mutual interests toward negotiable, tradeable policy outcomes. This transformation represents not merely rhetorical differences, but a structural change in the logic of security cooperation itself.
Traditional security cooperation has been built upon institutional alliances and long-term commitments, with arms purchases or industrial investments typically viewed as complementary arrangements rather than preconditions. However, when specific political preferences are positioned as prerequisites for security commitments, cooperation becomes closer to a transaction. This affects not only the bilateral relationship but also transforms how external actors view Taiwan's strategic position.
This shift poses significant symbolic risks for Taiwan. It may weaken the institutional trust-based cooperation logic that has traditionally underpinned relations with theU.S., while potentially causing other nations to gradually reassess Taiwan's role from an "indispensable strategic partner" toward a "supplier requiring continuous compensation."
In this context, transferring approximately 40% of semiconductor supply chain capacity to the United States could be interpreted as market diversification or risk mitigation, if only considering the problem from the short-term finances of a single enterprise. However, the decision transcends corporate-level investment choices when it becomes an explicit policy target of one of the countries in the bilateral relationship, turning into a restructuring of an entire industry.
The semiconductor industry's core competitiveness stems not merely from individual process nodes but from highly concentrated R&D clusters, engineering talent mobility, real-time upstream-downstream coordination, and accumulated technological expertise.
Once this structure is deliberately fragmented, even attempts at compensation through subsidies or targeted investments often fail to reflect true costs in export figures or GDP performance. Instead, these costs manifest in medium to long-term learning efficiency, innovation capacity, and integration depth.
Proponents of capacity relocation frequently advance optimistic narratives suggesting that through outbound investment and international division of labor, Taiwan can avoid excessive industrial concentration while addressing structural problems like stagnant wage growth and weak domestic demand. However, the critical issue lies not in risk diversification per se, but in whether industrial decision-making authority and technological accumulation space are simultaneously eroded. Should core decision-making gradually migrate externally, the initiative for industrial upgrading will correspondingly weaken.
More concerning than investment scale is the transformation of discourse structures themselves. When security commitments are expressed conditionally, their impact transcends diplomatic levels, affecting a democratic society's understanding of institutional trust and policy autonomy. No sustainable national development strategy can be built upon an exchange logic that undermines institutional trust.
Amidst ongoing global supply chain restructuring, Taiwan cannot remain detached. What truly requires comprehensive societal discussion extends beyond investment figures or capacity ratios to encompass how much industrial decision-making capability and policy autonomy Taiwan can retain during this wave of security and industrial structural reorganization. This represents not merely an economic choice, but a critical decision affecting institutional trust and long-term development trajectories.
*The author is a Distinguished Chair Professor at the National University of Kaohsiung （Related： KMT and Beijing to Discuss Increasing Tourism at Cross Strait Forum ｜ Latest ）
