Taiwan's Chip Dominance Gives It Strategic Leverage in Global AI Competition

Alek Mehta, heading the Wadhwani AI Center within the Center for Strategic and International Studies, highlighted Taiwan's unique advantage in the global AI landscape, calling its chip-making capability "the strongest card in the world." He explained that Taiwan produces about 90% of the world's AI servers and cutting-edge chips, which allows it to press for preferential treatment from the United States, such as early access to advanced AI models and computing allocations.

Although Taiwanese firms like TSMC are expanding manufacturing capacity in the United States, existing facilities with mature processes will continue to dominate production for several years. Mehta also pointed out that Taiwan is tightening export controls on AI semiconductors to match US restrictions, a move announced by Minister of Economic Affairs Kung Ming-hsin. This alignment, he said, strengthens Taiwan's negotiating stance with Washington without necessarily worsening ties with China. Overall, the island's semiconductor prowess positions it as a key diplomatic and economic lever in the intensifying US-China technology rivalry.