TSMC is the guardian angel of Taiwan. It is not only setting a high bar for global industries, but also instilling confidence in the Taiwanese people and placing the country under the international spotlight. But TSMC's announcement of a plan to increase its investments in the US to US$40 billion has triggered mixed and polarized responses. For the government, this policy cannot please both sides, but it is also an opportunity to demonstrate the government's policy direction and ability to keep things under control. Be prepared, make bold decisions, and don't look back.
We may have a better idea of how big US$40 billion is by measuring it against the GDP, which includes governmet spending, trade surplus, consumption and investment. Taiwan's GDP amounts to about US$800 billion, which means TSMC's US investment plan is equivalent to 5% of Taiwan's GDP. Of course the sum is not going to be all spent in one year, but the focus has been mostly directed to the implications of such a big investment project: Does it represent the US' ultimate bid to retake control of the supply chain, or the internationalization of Taiwan's semiconductor industry?
TSMC founder Morris Change has proclaimed the imminent death of globalization. My understanding is that the era of concentrating mass production in China is ending. The future is one that's characterized by regional markets and decentralized production ecosystems. The investment in the US is a part of the deployments for North America. Taiwan's semiconductor industry must also have its directions for Europe and Asia Pacific. The government's policy should not focus on piecemeal reviews of individual cases, but rather on overall understanding and global strategies with which it can help the companies.
Cross-strait tensions remain high. Concerning its semiconductor firms setting up plants in the US, does Taiwan have a long-tern national strategy, and short-term review mechanisms. The review mechanism in the TSMC case may involve several ministries, but the major reviewers are likely those from the Investment Commission, Department of Industrial Technology and the Industrial Development Bureau - all under the Ministry of Economic Affairs (MOEA).
The problem is that even if the lower-level government bodies have the know-how and ability to conduct reviews, it will remain a challenge for the government to communicate with the general public. We've often seen lawmakers demand ministers answer technical questions that their staff or lower-level officials were in a much better position to answer. Now these lower-level officials simply let their bosses shoulder all responsibility.
Secondly, the government will organize task forces to handle major issues, but these task forces should be formed not only by technical experts but also other experts, such as economists and people who understand the industries. Will the ideology of the experts play a key role? If "political correctness" is essential, then the ruling party must also tell the general public that it will make sure all the members of the task forces will give top priority to national intertest.
For the review of TSMC's US investment plan, director-level officials under different ministries should still make proposals and suggestions, and the government must assume full responsibility and make whatever decisions it will have to make. It is easy for the public to find faults, but it is difficult to make a feasible solution. Industry associations usually cannot really serve as "think tanks," and they receive too much funding from the government, which makes it difficult for them to go against the government's will. And now we are staring at problems arising from the fact that there hasn't been a clear line between the government and private sectors in a lot of cases.
The big trend is clear and you make a policy in response. Why should you be coy about that?