The Research Institute for Democracy, Society, and Emerging Technology (DSET) held the 2025 Taiwan–Japan–Korea Trilateral Technology Dialogue on December 6. The AI session focused on “peripheral innovation,” exploring how Taiwan, Japan, and South Korea can leverage their industrial foundations and shared democratic values to chart independent technological pathways and strengthen AI resilience within the democratic camp beyond intensifying US–China tech competition.
The session was moderated by Dr. Kai-Shen Huang, Director of DSET’s Democratic Governance Program, and featured Mitsunobu Koshiba, former President of JSR Corporation and current Outside Director of Rapidus; Hung-Wen Lin, author of The Radiance of the Chip Island and consultant to BusinessToday Weekly; and Jong Hee Park, Professor in the Department of Political Science and International Relations at Seoul National University. Together, they examined how the three countries can position themselves in AI development, industrial policy, and frontier technologies, and outlined directions for strategic cooperation.
Peripheral Innovation and a “Third Path” in Technology: From the “Periphery” to the Critical Path
Moderator Kai-Shen Huang noted that the concept of “peripheral innovation” challenges the prevailing AI narrative dominated by the US–China axis. On the surface, the United States and China appear to set the rules of the game, yet the operation of AI systems fundamentally depends on key hardware—logic foundry, memory, materials, and equipment—concentrated in Taiwan, Japan, and South Korea. Without the supply chain contributions of these three countries, AI would not function in the physical world.
At the same time, he underscored a structural anxiety shared by all three: while they hold the “lifeline” of hardware, they lack voice and influence in software and standard-setting, leaving them in the position of “hardware powers with software weaknesses.” Against the backdrop of US efforts to reshore manufacturing and China’s use of market scale to project technological power, Huang argued that as mid-sized powers, Taiwan, Japan, and South Korea must seek a “third path” beyond Washington and Beijing—moving from pure competitors to strategic collaborators, and using alliances and resource integration to reclaim agency over their digital futures.
Moving Up the Value Chain and Building a New Asian Community of Shared Destiny
Hung-Wen Lin observed that within the five-layer AI value stack—energy, chips, infrastructure, models, and applications—Taiwan, Japan, and South Korea have long been concentrated at the lower, less value-capturing layers. The United States controls roughly 68 percent of global IC design capacity, and China is on track to overtake Taiwan in IC design. If the three countries remain confined to foundry and supply-chain roles, they risk being shut out of competition at the top of the AI value chain.
Lin stressed that “products are king; manufacturing is the servant.” He argued that Taiwan, Japan, and South Korea must jointly move into high value-added IC products and AI applications, and use cross-border R&D platforms to break out of the US–China framework.
He invoked the notion that “a contingency for Taiwan is a contingency for Japan and Korea,” emphasizing the deep interlinkage between the three countries in both geopolitics and industrial security. China’s low-price strategies have already severely impacted South Korea’s panel, handset, and shipbuilding industries, while Japan has faced various forms of economic coercion. In this context, Lin argued, Taiwan, Japan, and South Korea already constitute a community of shared destiny.
He proposed that the three countries establish transnational research centers modeled on Belgium’s imec or France’s Leti, and expand cooperation with other democratic tech powers such as the European Union, India, and Israel in order to reduce structural dependence on US- and China-centric technology ecosystems.
Uneven Global AI Compute Distribution: Strategic Complementarity to Safeguard Democracy
Described as a key figure in Japan’s semiconductor revival—instrumental in bringing TSMC to Kumamoto and in shaping Japan’s advanced manufacturing project Rapidus—Mitsunobu Koshiba argued that Taiwan, Japan, and South Korea now face not only industrial competition, but also a struggle for the survival of their democratic systems and national security. The United States currently holds around 75 percent of global AI supercomputing capacity, China about 15 percent, while Japan has only about 4 percent—highlighting the significant disadvantage the three countries face in the compute race.
Koshiba stressed that while supply chains remain important, “supply chains alone can no longer protect our democratic systems.” If Taiwan, Japan, and South Korea wish to maintain technological autonomy, they must build a new form of cross-border technological cooperation based on strategic complementarity, rather than attempting to copy US or Chinese development models.
He proposed the creation of a “cross-border distributed AI factory”: the three countries would integrate their respective strengths, interconnect high-performance computing centers via optical fiber networks to build a shared, distributed compute infrastructure, and jointly develop interoperable open-source hybrid middleware. This would enable each country to build sovereign AI systems that align with its own culture and data, while operating on a shared technological foundation.
Koshiba cautioned that Taiwan’s so-called “Silicon Shield” is not a panacea and that national security cannot rely on a single industry; instead, the region must move early into frontier domains such as quantum computing. He emphasized that Taiwan, Japan, and South Korea share democratic values and each possesses irreplaceable strengths in materials, memory, and advanced logic manufacturing. By focusing on a small number of critical domains and moving toward highly specialized division of labor and “strategic interdependence,” the three countries can, from a longer-term geopolitical and technological perspective, build a trustworthy shared technical base that sustains technological resilience, protects democracy, and enhances security amid an increasingly concentrated US–China race for compute and resources.
Compute Sovereignty and Technology Governance: Building an AI “Third Pole”
Jong Hee Park argued that the world is shifting away from the “Washington Consensus” toward state-led industrial policy, as governments seek to enhance national competitiveness. In this context, compute sovereignty—a state’s ability to control and secure access to the compute resources, cloud infrastructure, and AI services it relies on—has become a central concern.
Park noted that South Korea, Japan, and Taiwan significantly lag behind the United States and China in the number of AI cloud regions, the supply of accelerators, and the scale of data centers. This makes it even more urgent for the three countries to cooperate to overcome structural constraints such as limited market scale, underdeveloped venture capital ecosystems, talent shortages, and fiscal pressures.
He emphasized that Taiwan, Japan, and South Korea are fundamentally complementary in AI hardware: Japan leads in equipment and materials, South Korea in memory, and Taiwan in advanced logic foundry. Together, they form the world’s most complete AI chip ecosystem.
Drawing on the example of ASML, Park pointed out that this Dutch-headquartered company has become Europe’s most strategic technological asset not because it is purely “Dutch,” but because it integrates technologies and talent from across Europe. Similarly, he argued, Taiwan, Japan, and South Korea can build an East Asian counterpart—a pan-regional strategic technology champion.
Park called for the three countries to establish an AI hardware alliance, shared compute centers, mechanisms for talent mobility, and coordinated AI governance frameworks. By doing so, they could form an AI geopolitical “third pole” capable of balancing the US and China, cultivate the next generation of globally influential strategic technology enterprises, and secure long-term technological autonomy and regional leadership for Northeast Asia.
Highlights of Semiconductor Session: DSET 2025 Taiwan-Japan-Korea Trilateral Technology Dialogue—The Northeast Asian Semiconductor Triangle: Cooperation, Competition, and Strategic Balance
Summaries of the sessions on energy and drone industries development will be published soon—stay tuned.
