'Leadership is not forever': Pompeo urges Taiwan to continually innovate to maintain chip dominance

Jerry Chen, DIGITIMES Asia, Taipei 0

Credit: DIGITIMES Asia

Former US Secretary of State Mike Pompeo visited Taiwan to attend the inauguration of Taiwan's fifth elected president on May 20, 2024.

This marked Pompeo's third visit to the island.

Following the inauguration, Pompeo spoke at a launch event for his book, "Never Give An Inch," at the Chang Yung-fa Foundation on May 21.

In his speech, Pompeo praised Taiwan's robust rule of law and pluralistic democracy and emphasized the crucial role Taiwan plays in the global economy.

"Any conflict that threatens Taiwan's stability has direct consequences for global markets, disrupting trade routes and supply chains, thus impacting not only regional but global economic stability—including that of the United States," he said.

Pompeo also lauded Taiwan's family-run small and medium-sized enterprises as the backbone of its economy. He highlighted the "pool of well-trained talents who run factories, manage industries, and govern with efficiency," adding humorously, "it is almost a marvel to find more US-trained engineers and entrepreneurs in Taipei than in some capitals in the West."

CHIPS Act and global leadership

When asked about the CHIPS Act and US-Taiwan semiconductor collaboration, Pompeo clarified that the goal of the legislation, conceived during his tenure as Secretary of State, was not to solely relocate semiconductor production to the US but to establish a high-level manufacturing presence that would complement global supply chains. He noted this was the rationale behind approaching TSMC and Samsung.

"The establishment of a US semiconductor ecosystem does not mean the United States or the world would no longer depend on TSMC," he said to the audience. He cautioned Taiwan to continue innovating in the semiconductor field to maintain its competitive edge over China.

"We were the global ship leader for an awfully long time. And then we lost it. Leadership is not forever," he warned.

Pompeo believes Taiwan's continued dominance relies on training the next generation of talent and a deep commitment to high-end research. "Every American company in this sector is counting on you to continue being innovative and creative, delivering not just for the United States but for Europe, India, and the world," he concluded.

The silicon shield

As a key advocate for the US to develop its own semiconductor production system to reduce economic dependence on China, Pompeo praised TSMC's 2020 decision to invest US$12 billion in a US plant while serving under the Trump administration as per reports from Reuters. He described it as a move to strengthen US-Taiwan ties at a critical juncture when China is vying to dominate cutting-edge technology.

Pompeo was also involved in the passage of the CHIPS and Science Act in 2022, urging the US Congress to pass the legislation. "The cost of compromise on this bill pales in comparison to the costs we will suffer if we allow the Chinese Communist Party to one day own and control access to our most critical technologies," he wrote on the Department of Commerce's website.

According to reports from Epoch Times and SETN, during a previous trip, Pompeo met with executives from various industries in Taiwan, including semiconductor foundry PSMC, food manufacturer I-Mei Foods, hotel operator Regent Taipei, and China Steel Corporation. He also held a video call with TSMC Chairman Mark Liu and met with founder Morris Chang.

In an October 2022 Wall Street Journal column that he co-authored, Pompeo argued that Taiwan's primary defense is its economic influence rather than its military might. He believes Taiwan's dominant position in the semiconductor industry, referred to by President Tsai Ing-wen as Taiwan's "silicon shield," can be leveraged as protection against Chinese aggression.

"If China annexes Taiwan, US manufacturers could capitalize on market dislocation by increasing domestic production while chip prices soar." He then suggested that building US semiconductor companies to fill the supply gap in case of Chinese annexation of Taiwan could also deter China from pursuing an attack.

However, Pompeo did not specify how the building of the US' semiconductor capacity could reinforce Taiwan's silicon shield, consequently deterring China's aggression.