Photo: Reuters

Taiwan is using its leadership in semiconductor manufacturing to strengthen global partnerships and expand its influence worldwide. In September 2025, Taiwan hosted the Semicon trade show in Taipei, which brought together key technology companies, governments, and industry leaders from around the world.

The event highlighted Taiwan’s plan to use its semiconductor and artificial intelligence capabilities to build diplomatic relationships, even though the island faces challenges in formal recognition due to China’s claims.

Taiwan has long been a global leader in semiconductor production, primarily through TSMC (Taiwan Semiconductor Manufacturing Company). TSMC is the world’s largest contract chipmaker and supplies critical chips to major tech companies including Apple,

Nvidia, AMD, and many others. Taiwan’s importance in the global tech supply chain gives it strategic leverage in international relations. Countries around the world depend on Taiwanese chips for technology ranging from smartphones to artificial intelligence servers, making Taiwan a critical player in global commerce.

At Semicon, Taiwan demonstrated its approach to “chip diplomacy,” a strategy of using its technology leadership to build political and economic influence. Officials emphasized that semiconductors are not just products; they are strategic assets that shape economic security and global innovation. By hosting this event, Taiwan showcased its technology, engaged with international partners, and strengthened its network of supportive countries.

Taiwan’s Strategic Partnerships

One key focus of Taiwan’s diplomacy is Central and Eastern Europe. Countries in this region have shown interest in Taiwan’s technology as they seek alternatives to Chinese infrastructure.

The Russian invasion of Ukraine has also influenced these nations, encouraging them to support Taiwan in balancing Chinese influence. For example, the Czech Republic is working with Taiwan to support TSMC’s first European semiconductor facility in Germany. Officials in these countries view collaboration with Taiwan as a way to strengthen democratic values while advancing technology.

Taiwan has also invited other countries that had previously shifted alignment toward China. For instance, Costa Rica, which had switched formal diplomatic recognition from Taiwan to China in 2007, sent representatives to the event. Similarly, a delegation of ten African tech entrepreneurs visited Taiwan to explore partnerships in semiconductor technology and innovation. These visits signal Taiwan’s efforts to expand engagement beyond its traditional allies, building practical, technology-driven relationships worldwide.

The Taiwanese government highlighted that semiconductors and AI are strategic resources that can help countries reduce dependence on China. The Foreign Minister, Lin Chia-lung, emphasized that partnering with Taiwan creates supply chains that are secure, transparent, and based on shared values. This approach positions Taiwan as not only a technology hub but also a partner in global economic and security strategy.

The Role of Artificial Intelligence

Artificial intelligence was another major topic at Semicon. With AI becoming central to industries worldwide, demand for specialized chips has surged. Taiwan, through companies like TSMC, provides the critical hardware required for training AI models, running servers, and supporting cloud computing. Taiwan’s focus on AI chips allows it to stay competitive in the fast-evolving tech industry and to influence global AI development.

Many countries attending the trade show are exploring AI applications in healthcare, transportation, and cybersecurity, and they see Taiwan as a reliable technology partner. Taiwan’s “chip diplomacy” strategy ensures that countries adopting AI solutions have access to high-quality, secure hardware, reducing reliance on Chinese technology.

Economic and Diplomatic Benefits

Taiwan’s strategy is yielding both economic and diplomatic benefits. Hosting major international trade shows like Semicon not only promotes the island’s technology but also strengthens informal alliances with like-minded nations. While formal diplomatic recognition remains limited—due to pressure from China—Taiwan is effectively building functional partnerships with countries and companies worldwide.

Through these partnerships, Taiwan can influence global supply chains, encourage secure technology practices, and reinforce its status as a key player in AI and semiconductor innovation. These connections also help Taiwan maintain economic resilience in a world where geopolitical tensions are increasing.

Challenges and Risks

Despite its successes, Taiwan faces ongoing challenges. China continues to pressure countries and organizations to avoid formal recognition of Taiwan. The island’s reliance on semiconductor dominance means that any disruptions to production or global demand could have significant consequences.

Taiwan must also navigate the risks associated with rapid technological advancement. While AI and chip technologies offer opportunities for diplomacy and economic growth, they also create vulnerabilities. Countries and companies must trust Taiwan’s supply chains, and any perception of instability could affect partnerships.

Another challenge is geopolitical tension in the region. Taiwan’s diplomatic strategy must balance engagement with the global community while avoiding escalation with China. Hosting international events like Semicon is a careful effort to project influence without triggering confrontations.

Global Implications

Taiwan’s chip diplomacy has broad implications for global trade and technology. Semiconductors are essential for modern economies, and Taiwan’s control over production gives it leverage in international negotiations. Countries that build ties with Taiwan gain access to reliable technology, which is increasingly important for AI, cloud computing, and advanced electronics.

The Semicon trade show also demonstrated how technology can serve as a bridge for diplomacy. Even without formal diplomatic recognition, Taiwan can foster cooperation, secure trade relationships, and influence global innovation. This approach allows Taiwan to maintain a prominent role on the international stage despite political limitations.

Taiwan’s strategy is a model for other small but technologically advanced nations. By leveraging key industries, such countries can build influence, secure economic partnerships, and contribute to global innovation, even in the face of larger geopolitical pressures.

Looking Ahead

Taiwan plans to continue expanding its semiconductor partnerships and promoting AI technology globally. Future trade shows and international collaborations will likely focus on security, supply chain transparency, and technological innovation. Taiwan aims to increase its influence among both established allies and emerging technology markets.

By demonstrating the importance of secure chip supply chains, Taiwan is positioning itself as a critical partner for democracies worldwide. Countries looking to reduce reliance on China, particularly for high-tech products, will continue to see Taiwan as an indispensable collaborator.

In addition, Taiwan’s focus on AI infrastructure positions it to influence the global development of AI responsibly. By combining technological leadership with strategic diplomacy, Taiwan strengthens its international standing and builds practical alliances that extend beyond formal recognition.

Taiwan’s chip diplomacy at the 2025 Semicon trade show illustrates how a small nation can leverage technological leadership for global influence. By promoting semiconductor and AI expertise, Taiwan strengthens partnerships with countries across Europe, Africa, and the Americas.

While formal recognition remains limited due to China’s claims, Taiwan has successfully built functional alliances that support its economy, security, and technological development. Semiconductors and AI serve as tools for diplomacy, creating both economic and geopolitical advantages.

Taiwan’s approach shows that even in a complex global environment, technology can act as a bridge, fostering cooperation, trust, and shared progress. By continuing to use chip diplomacy, Taiwan secures its role as a global technology leader and builds long-term partnerships with like-minded nations.

The Semicon trade show was more than a business event; it was a demonstration of Taiwan’s strategic vision, combining technology, diplomacy, and economic influence. Through careful planning and leveraging its expertise, Taiwan remains a vital player in global technology, proving that innovation and diplomacy can go hand in hand.