Dr. Jeremy Chih-Cheng Chang, CEO of the Research Institute for Democracy, Society and Emerging Technology (DSET), was recently featured on PIVOT TALK WORLD, an international affairs program by Japanese business media outlet PIVOT. He joined Momoko Kawakami, Professor at Kanagawa University, for a discussion on Taiwan’s recent economic growth, the restructuring of global semiconductor supply chains, and prospects for Taiwan–Japan industrial cooperation amid intensifying competition.
The released video covers the first half of the interview, with the second half available on PIVOT’s streaming platform (PIVOT – Business Video Media App).
The discussion opened with Taiwan’s recent economic performance. The host noted that Taiwan’s GDP growth reached 8.68% in 2025, with per capita GDP surpassing Japan in 2024 and South Korea in 2025. Kawakami attributed Taiwan’s strong growth to two key factors: the rapid expansion of AI-driven demand and the ongoing shift of supply chains away from China. With its comprehensive ecosystem spanning semiconductors to electronics manufacturing services, Taiwan has emerged as a major beneficiary of the global surge in AI hardware demand.
From a geopolitical perspective, Dr. Chang observed that the United States has reemerged as Taiwan’s largest trading partner, reflecting a gradual reduction in Taiwan’s reliance on the Chinese market. He also noted that while China has frequently employed economic coercion against Taiwan, such measures have largely targeted agriculture, fisheries, tourism, and select traditional industries, with limited impact on Taiwan’s most critical sector—electronic components. This underscores the strategic importance for mid-sized economies of maintaining irreplaceable positions in key intermediate goods within global supply chains.
Addressing concerns over Taiwan’s perceived dependence on semiconductors and AI, Dr. Chang emphasized that Taiwan’s industry does not view itself as reliant on a single sector. Taiwan’s central role in the AI supply chain, he argued, is not the result of top-down industrial policy, but rather the outcome of long-term capability accumulation in manufacturing, integration, and technological development. He noted that while Taiwanese firms were still deeply embedded in Apple’s supply chain just three years ago, they have rapidly pivoted toward the AI ecosystem. This transformation has been driven by firms’ ability to identify niche positions, scale operations, and strengthen integration capabilities—factors he described as the foundation of Taiwan’s industrial resilience across successive technological waves.
The program also examined the strategic significance of TSMC’s fab investment in Kumamoto, Japan. Kawakami noted that while the new facility represents a positive development for Japan, it should be understood as part of TSMC’s broader global capacity adjustments, rather than a fundamental shift in Japan’s position within the company’s global footprint. Dr. Chang added that the drivers behind TSMC’s investments in the United States and Japan differ: U.S. investments are largely shaped by political pressure and friend-shoring policies, whereas investments in Japan are more influenced by market demand, cost structures, and government incentives.
Despite these developments, Taiwan’s core strength in the global semiconductor industry remains its highly dense and integrated industrial ecosystem, encompassing large-scale manufacturing capacity and continuous advancement toward next-generation technologies. Dr. Chang emphasized that this “irreplaceability” not only underpins Taiwan’s economic security, but also directly relates to its national security, particularly as technological and industrial interdependence with the United States and Japan deepens.
Looking ahead to Taiwan–Japan semiconductor cooperation, Dr. Chang noted that Japan continues to hold dominant positions in several key intermediate goods and technologies. However, firms face challenges stemming from demand uncertainty and constraints on large-scale investment. Given the potential volatility of AI-driven growth, reducing investment risks will be a critical policy issue for Japan. He further argued that future economic security strategies should move beyond traditional, closed models of self-sufficiency, and instead pursue “strategic autonomy” grounded in cooperation among allies, where costs and risks are jointly shared. Given the inherently interdependent nature of the semiconductor industry, efficiency and security can only be achieved through coordinated division of labor among trusted partners.
Dr. Chang concluded that Taiwan is currently experiencing a historic opportunity driven by AI. From chips to servers and data centers, Taiwan’s role in the global hardware supply chain continues to expand. However, the central challenge lies not in short-term growth, but in translating this momentum into a durable position within the global industrial order. Strengthening control over key technologies, securing critical supply chain nodes, and deepening international partnerships will be essential in the next phase.
