According to David Weng of Taiwania Capital a national investment firm, Taiwan, known for its semiconductor prowess in the past, is positioning itself to be a critical hub within the global AI revolution. Taiwan is at the center of an important strategic realignment as Sino-US tensions change the tech supply chain. This could determine the future of AI manufacturing.
Weng spoke about the geopolitical importance of Taiwan in the AI, semiconductor and electronics domains. Taiwan’s importance as a trusted provider of high-tech components has been boosted by the strategic competition between China and the US, especially in areas relating to digital and national security. Democracies’ move away from Chinese solutions underscores Taiwan’s crucial role in securing global data and supply chains.
Taiwan’s advanced manufacturing capabilities, from chip design to the assembly of servers, make it indispensable for AI giants. Weng said that servers for Microsoft, Amazon or other companies are made largely in Taiwan. He said that Taiwan is the global leader in both IC packaging and processing.
Taiwania Capital – under the leadership of Weng – has been actively raising money to capitalize on these opportunities. The firm has set up six venture funds so far, and nine more are expected to be established by the end of the year, with a capital pool that could exceed NT$30 billion.
The firm is working to establish international connections with countries outside the US, such as Japan, Central and Eastern Europe and Southeast Asia. This global approach includes fostering partnerships between Taiwanese startup companies and international tech giants. This effectively combines innovative ideas from the West, with Taiwan’s manufacturing experience.
Taiwania’s partnership in Central and Eastern Europe is a notable example of the strategy. These collaborations are focused on developing data centres and private 5G solutions by leveraging Taiwan’s strengths in ICT and AI. Taiwan’s advanced manufacturing capability, especially in AI and robots, plays a key role in these partnerships. This enables the production of cost-effective solutions with high quality that are essential for global markets.
Weng said that while Taiwan’s tech industry is buzzing with developments of low-Earth orbital satellite and hydrogen energy, Taiwania Capital has a more reserved attitude to these areas.
Weng believes that AI-driven defense technology is a “megatrend” that has been accelerated by conflicts such as the Russia-Ukraine conflict. He highlighted Taiwan’s potential in developing AI-driven defence systems, including auto-pilot and drone technology.
Weng acknowledged that Taiwan was limited in its ability to compete with Large Language Models due to the massive data and investment required. However, he highlighted edge AI as an exciting next wave. ” Taiwan is the next big opportunity for edge AI,” Weng said, pointing out applications in devices and localized AI.
Weng warned that despite these opportunities, there was a growing shortage of engineering talent in Taiwan which could potentially limit the growth of the burgeoning AI industry. Taiwan’s skilled workforce and strong education system are not enough to solve this talent shortage. He stressed the need for strategic initiatives that cultivate and attract qualified professionals to sustain and increase Taiwan’s competitive advantage in these critical sectors.
Taiwan’s unique position within the tech supply chain, as global demand for AI infrastructure and chips surges, could lead to significant economic benefits. Nevertheless, there are still challenges, such as the need to move higher up the value-chain into systems and software development.
Weng concluded that “Taiwan truly is at the center of this AI revolution or transformation.” Taiwan’s manufacturing automation expertise and solid ICT foundation will allow it to play a key role in shaping the future AI technology, if it can navigate the complex geopolitical landscape and talent landscape.