Why Taiwan Matters - From an Economic Perspective

William Alan Reinsch: Well, welcome, everyone. Welcome everyone in our live audience and welcome those of you that are watching this live. Let me begin by saying, particularly to the minister, that Dr. Hamre regrets very much that he’s not here to welcome you personally and then to introduce you. At the last minute, he was called out of town for a meeting and he’s unable to get back in time for this event. And he’s very sorry about that and hopes to find an opportunity to catch up with you on another occasion.

As his replacement, it’s my great pleasure to introduce our guest for the day, and then to have a conversation with her afterwards, which we will follow then with audience questions. And on the housekeeping side, I’d just say for those you that are here live, we have a standing microphone over here. And when we get to that point, just go over there and line up. We will also take questions from our online audience. And you should have a button on the invitation that you can click on to enter your online questions. At least one person has already done that, so I know that it works.

Now, it is a great honor for me to introduce Mei-Hua Wang, who is the minister of economic affairs for Taiwan, appointed to that position in June of 2020. She has spent her career in the Ministry of Economic Affairs for over 40 years – although, I have to say, you look much too young to have had a career of that length. As the third female minister in the Ministry of Economic Affairs’ history, Ms. Wang is responsible for policies related to industrial and commercial development, international trade, foreign investment, energy and other economic issues.

Her current focus, and I think you’ll hear this in her remarks, is on energy transition, industrial innovation and upgrading, investment promotion, and regional economic integration. Ms. Wang also has authority over state-owned enterprises, such as the Taiwan Power Company, CPC Petroleum Corporation, and Taiwan Water Corporation. In other words, everything that makes Taiwan run is under her purview. Before serving as minister, she – her specialty was in international property, and she has 20 years’ experience working at the intellectual property office in the ministry.

So with that, I’d a great pleasure to welcome the minister and ask her to come up, initially to make remarks and then we’ll have a conversation. (Applause.)

Minister Wang Mei-Hua: Thank you, Bill. And all the distinguished guests and friends, good afternoon. I would first like to thank CSIS for hosting this event. It is my great honor to be here. Today, I would like to share with you Taiwan’s commitment to the U.S.-Taiwan partnership as well as why Taiwan matters to the United States and the global supply chain from an economic perspective.

So, first, you can see from this slide the waters surrounding Taiwan are home to the busiest shipping lane in the world. This area is densely filled with cargo ships and cruisers. China, Japan, South Korea, and many other countries all depend on the shipping lanes to deliver their goods to the world, and vice versa.

And in terms of the geopolitical location, Taiwan is located at the center of the first island chain of the west Pacific. Taiwan’s pivotal location in the Indo-Pacific serves several strategic purposes for regional powers, both offensive and defensive.

With that in mind, if Taiwan were to become under threat or be in crisis, it will not only have a severe impact on global shipping and logistics but it would also have an impact on the political and economic order of the Indo-Pacific.

And not only does Taiwan hold a vital geostrategic position, it’s also a thriving hub for international trade, making it a very critical global supply chain partner. Last year, Taiwan became the world’s sixteenth largest trading economy with trade exceeding $800 billion U.S. for the first time in Taiwan’s history.

Moreover, as a vital ally of the United States, our bilateral trade relations have continued to grow. In 2021, we became United States’ largest trading partner. The bilateral trade in goods surpassed $100 billion U.S. for the first time. But the substantial relations were much far beyond the figures.

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Of course, our trade performance is supported by the foundation of our industrial strengths. Taiwan has the advantage of having an ecosystem of friendly industrial cluster, which allow for the highly effective industrial supply chain that are able to quickly respond to market changes. This makes it possible for us to provide the world with innovative high-quality products.

For example, we account for 80 percent of the global market’s share of laptops and the motherboards, and 60 percent of the world’s network devices are manufactured by Taiwan. And our bicycle brands include Giant and Merida are well known around the world and we are the fifth largest exporter of machine tools with a high cost performance ratio, and we also have 70 percent of all functional textile and apparel come from Taiwan. We manufacture for brands such as Adidas, Nike, Lululemon, and Under Armour. Of course, Taiwan’s bubble tea is also well known around the world.

And for decades the United States has been Taiwan’s most important partner thanks to our deep cooperation and the vibrant economic, trading, and cultural relationship. Taiwanese businesses also consider U.S. company to be vital economic partners. Both sides have established strong supply chain relationships over the years.

For example, Taiwanese company have long-term relationships with the leading U.S. brand of consumer electronics, such as Apple, Dell, HP, and many other company. Taiwan’s role have evolved from the OEM/ODM model to the EMS. EMS is electronic manufacturing services. Services that is – may also include design.

So for these reasons, U.S. company global deployment strategy plays a very key role in guiding the investment direction of Taiwanese company. So Taiwanese company work with U.S. brand to set up manufacturing plant in China. For example, Foxconn, a very famous company, is the world’s largest contract electronic manufacturer, support Apple’s iPhone. And they have the very big operation in China.

So because such kind of the supply chain, this aid to the export of critical parts from Taiwan, especially including semiconductors, to China. So if you look at our global export figures, Taiwan’s export to China, of course, including Hong Kong, account for 42 percent of our total export. Among that, more than 15 are semiconductor export. And if you only look at the semiconductor export, Taiwan semiconductor export to China make up 60 percent of our total exports.

Why so high percentage export to China? That is because the all majority – I say, not all – but the majority of different kind of the electronic devices made in China. And for those device, need a lot of the semiconductor. That’s a very critical part. And those electronic devices are designed or controlled by the U.S. company. So we also mention about the triangle trade relationship. That is the meaning, for including the Apple iPhone and the HP laptop.

So from these slides, you can see we have some different situation. Because the fast-changing global condition and the growing uncertainty of China’s political and economic environment, American business are adjusting their investment strategy. So Taiwanese company will also continue to follow their lead and redirect their investment destination. Again, Taiwanese company are setting up in India for iPhone assembly operation. And other companies are moving to the Vietnam and other Southeast Asia country to produce laptop.

So with this regard, the figures reflect the shift of the Taiwanese investment. In 2018, when the U.S.-China trade conflict began, Taiwanese investment in

Asia and India amounted for 9.5 percent of our total outbound investment. Now the figure has grown to 25 percent. Furthermore, given the advantage to be closer to customers, Taiwanese investment in the U.S. now make up 11 percent of our total outbound investment.

In the same period, our investment in China has seen a big decline. China make up 83 percent of our total outbound investment in 2010. But today that figure drop to 32 percent, with a decrease of over 50 percent. And the figures also show that Taiwanese company are taking more balanced global investment strategy to diversify and spread the risk.

And another impact is international brand gradually shifting away from China. Some Taiwanese company have chosen to reshore manufacturing to Taiwan. So to support their reshoring efforts, in 2019 my government initiated investment program to attract them back to Taiwan. So we have resulting 60 billion U.S. dollars in the new investment and making the Taiwanese supply chain ever more integrated and complete. That never seen before, such kind of the trade.

So now let’s take a look at the topic of Taiwan’s semiconductor industry I think many of you may be more interested in. Taiwan’s semiconductor manufacturing play a very key role in the global economy. Our total market share for foundry occupied 63 percent of the global market. In terms of the advanced semiconductor chips, Taiwan produced 73 percent of the advanced processing chips, below seven nanometer. We also lead the world in R&D work for developing more advanced; for example, two-nanometer process.

The success of Taiwan’s semiconductor industry actually highly relied on joint collaboration of the global supply chain. We need collaboration with the world. Without the U.S., EU and Japan’s support in upstream equipment and material, we won’t be able to manufacture the best semiconductor products.

So through this model of cooperation, Taiwan provides the best semiconductor manufacturing to serve the leading American IC design company, forming a complete supply-chain relationship. So in the future, AI, 5G, the high-performance computing technology will all require more advanced semiconductor chips. Taiwan will continue to work closely with our global partners, especially the United States, to engage in the development of advanced semiconductor manufacturing.

With the regulatory structuring of the global supply chain, many countries are focused on supply-chain security and resilience, particularly with regard to the semiconductor industry. Actually, the semiconductor industry is a

highly complicated and advanced manufacturing industry. It took Taiwan over 40 years to develop our industry. It require high-quality talent, require very good IP protection. And in Taiwan we have more than 1,000 companies in our supply chain, alongside with the stable infrastructure, including the water, the stable electricity.

And most importantly, semiconductor are a product of international cooperation by nature. No single company can independently operate to complete the entire semiconductor manufacturing process.

Of course, Taiwanese focus on foundry, and we collaborate with global design company and equipment and material suppliers to achieve the most efficient semiconductor manufacturing model, which also in turn support the growth of other industries. Taiwanese company are develop to continuously technologic breakthrough and to providing the world with the most advanced, highest quality, and most cost-effective semiconductors. For these reasons, I believe Taiwan is in the key position that cannot or very difficult to be replaced or re-predicated.

So, today, the majority of the world’s most advanced semiconductor manufacturing take place in Taiwan. Any disruption to this in Taiwan could severely impact the high-tech sector and economies around the world. This highlights Taiwan’s interconnectiveness with the global economy. This demonstrates why Taiwan is so important. By interfering or disrupting Taiwan, China itself will also be greatly impacted.

As I mentioned earlier, such production facility depend on extensive connections with the outside world – with the United States, EU, and Japan – to ensure the foundry operation. That’s why I reiterate again and again, because that is very important. (Laughs.) So if Taiwan’s TSMC operation is controlled or take over by military force, this would stop TSMC’s operation.

U.S. Secretary of State Blinken has stated that were anything to happen to Taiwan, the effect on the global economy would be devastating. I would like to put it in another way. So if Taiwan is safe, the global supply chain will also be secure. This is in the world’s greatest interest for Taiwan to work with U.S. and other allies to maintain the most efficient production.

I would like to highlight again the fact that Taiwan’s economy is highly connected to the world, and that the world cannot thriving economically without Taiwan’s stability and success. China also needs Taiwan’s semiconductor products as much as the rest of the world does. So if Taiwan

were to become involved in a conflict, the whole world would be affected for lack of access to Taiwan’s technology and products. This also include the U.S.

So in the future I would be keen to see more cooperation between Taiwan and the U.S. by leveraging our strengths. The United States and Taiwan are natural allies and partners. We both share universal values of democracy, human rights, rule of law, and market economies. Our priority is to work with the United States to form a resilient supply chain. We will continue to ensure the pivotal role of division of labor.

Thank you, everyone, for your time and attention today. I hope that Taiwan and the U.S. relationship will continue to grow stronger than ever. So let’s work together to create more prosperity and benefit to all. Thank you. Thank you very much. (Applause.)

Mr. Reinsch: Well, thank you for those remarks. Those certainly provide a lot of food for thought and discussion. As I said in the beginning, we’re going to have a conversation and then we’ll have questions from both of – both sets of our audiences. Going forward, I should say that the minister has an important meeting right after this event, so we’re going to stop on time or perhaps a few minutes early to make sure that she doesn’t miss that.

I wanted to talk about semiconductors, but let’s begin with a bigger question and just focus on the – sort of our administration, which is now in its – you know, well into its second year. But maybe you can say a few words about how bilateral relations between Taiwan and the United States have changed under the Biden administration compared to previous administrations.

Min. Wang: Thank you. I think under the Biden administration Taiwan and U.S. relationship is even more robust and continue to grow because we have a lot of the dialogue. And very important is concerning the supply chain cooperation. I just mentioned Taiwan is a natural partner with the U.S., so that have a lot of room for dialogue to strengthen the supply chain cooperation.

And of course, we are very thanks the Biden administration to initiate the 21 – U.S.-
Taiwan 21^st Century Initiative that is the same page with the IPEF. So we are very thankful for initiating such kind of the negotiation.

Mr. Reinsch: My sense is that’s just beginning. Not much has happened yet, right?

Min. Wang: Yes, yes.

Mr. Reinsch: We’ll have you back at a later date and we can talk about progress.

Min. Wang: Thank you.

Mr. Reinsch: One of the things that’s happened here is that I think there’s been a great focus on Taiwan in the last year or so, partly because of its importance to the semiconductor supply chain which you’ve commented on and also because of more and more remarks coming from China that have concerned us. You saw – you quoted Secretary Blinken on one of your slides. One of the consequences of that is that our Congress has begun to focus on Taiwan as well and they have begun to move legislation such as the Taiwan Policy Act, which has made it out of the Senate Foreign Relations Committee – it has not yet gotten to the Senate floor – that would, among other things, formalize bilateral trade negotiations. I’m not sure that our administration has taken a position on the bill, but I’ll ask you, what is your view of the congressional approach? Is it something that you welcome or are you more neutral?

Min. Wang: Thank you. Actually, we quite appreciate the bipartisan support for the strengthen Taiwan and U.S. relationship. And that’s true they also are talking about our two country need to establish the bilateral trade agreement. We quite appreciate such kind of the arrangement and support for the BTA because the political reason for Taiwan very difficult to approach for the bilateral or multilateral or plurilateral FTA. So if the – we can have the relationship with the U.S., not only strengthen the Taiwan-U.S. trade relationship but also can strengthen the supply chain, and also make Taiwan more safer and make other country understand, hey, you also can have the bilateral trade with Taiwan. Yeah.

Mr. Reinsch: Let’s turn now for a minute to – or more than a minute – drill down a little bit on semiconductors. You’ve already laid out Taiwan’s role in the semiconductor value chain. First let’s start with the general. What can the United States do to help build a more secure and resilient semiconductor supply chain with Taiwan?

Min. Wang: I just mentioned currently Taiwan has very important role in the semiconductor supply chain. We dominate the foundry area. So everyone needs more advanced the semiconductor. Taiwan will be a key player in the world and to make global more prosperity and I think make Taiwan more safer – (laughs) – and peace. That is the key issue, in my view.

Mr. Reinsch: Well, related to that, we had an event – the administration had an event last week. They rolled out a new rule on export controls, which is focused primarily on semiconductors and semiconductor manufacturing equipment and is focused primarily on China. Can you say a few words about how Taiwan or how you think Taiwan is going to be affected by that new policy in

general? And how is it going to affect the Taiwanese companies that are operating in China and making products in China that contain chips?

Min. Wang: First, mostly semiconductor manufactured in Taiwan; in China with just a small part of the percentage in China and the more mature process. All of the advanced semiconductor all manufactured in Taiwan, first.

And second, I think the Taiwan – the focus on the foundry. So we follow the design-company direction and we follow their advanced process. We manufacture such kind of design. So for our company, they follow not only domestic regulation, but also need to follow the regulation from their current country. So if have any new regulation need to be followed, our company will follow the rule, not only the domestic but also the other countries or international regulation.

And such kind of new regulation have the two aspects. One is for the high-performance chips. Another is for the equipment. I just mentioned about we – in equipment area, we rely on the – from EU and U.S. company. So that is, I think, have no relationship with Taiwan.

Mr. Reinsch: It’s really about the chips for you, yes.

Min. Wang: Yes. And concerning the chips, that is for the most advanced chips. But I just mentioned our company is contract manufacturer. So they follow the clients. So I think that is the follow the client’s direction and follow the country’s regulation. And as I know, the U.S. – the new restriction focus only on some area, but not touch about the consumer products. So consumer product is excluded. So as I know, that is the current regulation.

Mr. Reinsch: So do you see Taiwanese companies deciding to move out of China because of the new rules, or do you think that it just won’t affect them because it mostly involves consumer products?

Min. Wang: Not like that. That is because the new regulation is for chips, right, and all advanced chips are made in Taiwan, not in other countries. And actually, afterward were manufacture in U.S. also – (laughs) – but currently are made in Taiwan. And the according to the regulation, as I know, because the regulation have more than 1,000 pages – (laughs) – is their understanding. But as I know, they only restrict without the consumer products. So consumer product is coded outside the regulation.

Mr. Reinsch: The Chinese have been very critical of the U.S. action, which is no surprise. Do you think that they, ultimately, might retaliate and do something that might affect Taiwanese companies as well?

It’s not your rule. It’s our rule. But then again, they get to decide what to do about it.

Min. Wang: (Laughs.) Taiwan just follow the rule, not the proactive role in this issue. Yeah.

Mr. Reinsch: Let’s move on to – get away from semiconductors for a minute. We may come – I think we’re going to come back to that.

But during the pandemic a lot of places closed down worldwide and it created a lot of disruption in the global economy. Which sectors of Taiwan’s economy were most affected by supply chain disruptions then and what did you do to try to minimize those disruptions?

Min. Wang: Very interesting is – no voice? It’s OK?

Very interesting is at the outbreak of the – of COVID-19 many people think Taiwan will be – faced a very severe situation because we are close to China and we have a close trade relationship.

But, fortunately, because we had the SARS experience in 2003 so we get a lot very quickly in our response to the COVID-19. So, fortunately, we took action very quick and effective, including my ministry also involved the PPE – provides the PPE, most notably is mask. My ministry in charge of the mask making.

So, actually, we didn’t affect it in the manufacture sector, only the service sector, because the COVID-19 at the very beginning we have the lockdown or very few people go outside for the restaurant. And so I can tell you, overall, we are not affected in manufacturing sector at all. That’s why our economic performance were in the 2020 and 2021.

In 2020, our GDP grow more than 3 percent. In 2021, our GDP grow more than 6 percent. So compared to other countries, I think we protect ourselves very well. (Laughs.)

Mr. Reinsch: One of the points that you made in your remarks that were on the chart above our heads was that – or, about – (audio break) – campaign – (audio break) – to extend its global economic footprint?

Min. Wang: Yes. President Tsai took her office in 2016. She understand Taiwan is too focused on the China investment. So, at that time, President Tsai raised the very important policy that means a New Southbound Policy. That is mean Taiwan need to have the more diversify our investment in the foreign area,

and after the U.S.-China trade conflict in 2018 more and more company either diversified their investment or follow their upstream company to diversify investment in the Asian country or India.

So, that is, the situation changed. And another issue also because the China – their political or economic or environment are different so also make – company need to move out their base to other countries. And, of course, after the U.S.-China trade conflict some product is quite concerned about the security issue, especially in the telecommunication area.

So the company also need to diversify their manufacture base outside China. So that’s why I just mentioned about us. We are investments in South Asia country and some moved back to Taiwan. Currently, they also invest in U.S. and maybe also some to the EU country. So that is very diversify in the current situation. Yes.

Mr. Reinsch: What do you think – beyond the United States, what do you think is the two or three most attractive other non-China locations for Taiwan investment? Where are they going, India or other – elsewhere in Asia or somewhere else?

Min. Wang: Yeah. I just mentioned Taiwan is special in the ICT area. But our ICT always cooperated with the U.S. company including the Apple, Dell, HP. So they – maybe some follow the direction of those countries – company and then to the – sometime to the India and some to the VLM or other South Asia countries. So that is the scenario.

Mr. Reinsch: One of the new terms that you’re seeing here is nearshoring. Sometimes we call it friend shoring. The administration frequently refers to reshoring, which is coming back here. But nearshoring is – friendshoring is going elsewhere.

The policies that are intended to incentivize companies, basically, to move their operations out of China and to construct supply chains that are more resilient, is this a policy? What does your government think about this and is this a policy that Taiwan is pursuing as well?

Min. Wang: Actually, Taiwan is quite close with the U.S. company. So diversify to manufacture in a different area is – sometime is needed because the cost efficiency issue may be the – have the different market or different labor, for example.

So the friend shoring, that is mean – also needed globalization. But the second view is need to check the location is friendly or not. (Laughs.) That is my interpretation.

So all Taiwanese company reshoring, all our company reshore back to Taiwan all to – they relocated to the Asia country I think also follow such kind of the ratio. Yeah.

Mr. Reinsch: Let me alert the audience we’re getting almost time for you all. So if you’ve got questions, feel free to come over to the mic because I’m going to ask one more and then turn to the audience. And I’ve got a few more if we don’t have any questions.

But my last one at this point would be: What additional economic-policy support would you like to see from the United States?

Min. Wang: I think the – establish a more stronger relationship is very important. So have the new BTA is very good, good idea. And recently, because some company would invest in U.S., so they also ask for the avoidance of the double-taxation issue, the so-called ADTA. So if you have an ADTA that will attract more Taiwanese company to investment in U.S., yes.

Mr. Reinsch: OK, thank you.

Let’s go to our live – I’m going to alternate. Let’s start with our first live for some of the questions. Can you begin please by identifying yourself? And then be sure to ask a question.

Q: Yes. My name is – is this on? My name is Tina Chung with Voice of America’s China Branch. (Speaks in a foreign language.)

My question is: There are a lot of discussions in this town about the possibility or the potential – (comes on mic) – oh, I’m sorry. (Laughs.) My name is Tina Chung with Voice of America’s China Branch.

My question for Minister Wang is that there are a lot of discussions in this town about the potential invasion of China to Taiwan – against Taiwan, and you also mentioned this part of geopolitical reason. So my question is: For Taiwan’s Ministry of Economic Affairs, have you assessed the vulnerabilities of Taiwan’s major important infrastructures against any possible conflict, as the host has just said, about everything that makes Taiwan run? So is there any kind of assessment for this kind of potential impact on Taiwan’s economy? Thank you.

Mr. Reinsch: Do you want to do English or Chinese?

Min. Wang: First, just my presentation mentioned about I tell you, if Taiwan faced the risk, what will be the consequences of the economic development, not only

for Taiwan but also for U.S., for China, and for all of the world? You can see the Taiwan in a very critical position. And also we have a very critical industry in the world. So if you are reasonable person, you think twice – (laughs) – if you have such kind of conflict, how huge impact will be for the individual country and for all of the world, the first.

And second is Taiwan, yes, we need to defend ourselves. And actually, more detail is concerning the defense policy. But we – our ministry will follow the guide to have some preparation; preparation not for the war. Preparation is for the readiness of the defense ourselves. So, sorry, I cannot tell you the detail. But we have such kind of the conscious we need to prepare ourselves, yes.

Mr. Reinsch: OK, let’s do an online question now. You probably aren’t going to want to answer this one. But what would be the economic and trade implications of a possible Chinese blockade on Taiwan? How is Taiwan prepared to respond alone, and also with regional and global partners like the U.S.?

Min. Wang: Yeah. Actually, the question is quite similar to yours. And that is a more defense, the area, not for the economic area. (Laughs.) But I just mentioned from my presentation, the first one – the first page, you can see how important Taiwan. So if you blockade Taiwan, you also block many other countries, including China itself. So I just tell you the consequences; I cannot tell you how we can do because I’m not minister of the defense. (Laughs.)

Mr. Reinsch: OK. I think we just – we have two more audience questions, and then –

Min. Wang: But I can have some – say some words, is we quite appreciate the United States support for Taiwan in many areas that is very, very critical and important, yes.

Mr. Reinsch: Let’s do the next audience question. And then – we’ll have two of those and then it’ll be time to wrap up, I think. Please identify yourself and ask a question.

Q: Thanks, Bill. Dave Nelson.

Mr. Reinsch: I know who you are, but tell everybody else. (Laughs.)

Q: I know. Dave Nelson with Cargill. Thank you very much for begin with us, Minister.

Mr. Reinsch: Cargill.

Q: We’re an agriculture commodities trading company and manufacturing, been present in Taiwan for a long time, importing and exporting and local manufacturing. And we really – first, I’d like to express appreciation for the regulatory moves that Taiwan has made recently in the importation of some products in the ag space. Really important.

My question is actually not related to agriculture directly, but again on the relationship – the risks with China. What lessons do you think Beijing is drawing from Ukraine and in particular from the economic sanctions that are – that are being applied against Russia in that situation? How relevant do you think they’re seeing that for your situation?

Min. Wang: I don’t know what China will think about – (laughs) – the Russia and Ukraine war. But for me, I just tell the people how severe consequences if have such kind of a conflict will be for China because in my PowerPoint I just mentioned about, actually, we export a lot of the products to China to support them assembling the final product and then sell to all over the world. So China depend on Taiwan to supply them semiconductor, the critical parts, and then they can make more profit for their economy. So if they have the – such kind of the action, that will impact the China economy very severely. So I just tell you in the economic aspects.

So I also want everyone know. I also want that China understand the situation. So if the China want to be stronger or want to be the big country, they need to think about or think twice or more, yes. (Laughs.) That’s my opinion, yes.

Mr. Reinsch: Next question from the audience. This may have to be – two quick ones, if we got a short one here.

Q: Thank you, Minister Wang, for your remarks. My name is Amir. I am a grad student at Johns Hopkins SAIS in D.C. By the way – (speaks in a foreign language) – at SAIS.

In your remarks, you mentioned that Taiwanese companies are pulling out of China. So you gave some figures of 83.8 percent in 2010 to 32.4 percent in 2022. My question is, do you think that the decreased interdependence between Taiwan and China will be an incentive for the leadership in Zhongnanhai to kind of provoke some kind of military contingency across the Taiwan Strait?

Min. Wang: Two aspects. Even though we are not increase the investment – not that before, but we still – (laughs) – have a huge base in China. And second,

even though not investment in China, but a lot of the product also need import from Taiwan. So Taiwan’s the very critical role for China, yes.

Mr. Reinsch: One last question.

Q: Hi. Thanks for getting us in. Dave Shepardson with Reuters.

Can I just ask: As the U.S. government subsidizes more chips manufacturing here in the United States, are you concerned that that will lessen the U.S. reliance on Taiwan? And where do you see Taiwanese chip production going in the next, you know, five to 10 years?

Min. Wang: I just mentioned about the semiconductor supply chain in Taiwan. It’s very, very complete and we are through the more than 40 years establishments, so we already built. I think no one in the world have the similar situation in Taiwan. So we are very proud of that and we also improve our supply chain ecosystem in Taiwan.

Concerning our investment in U.S., that is because for TSMC most of TSMC client actually from U.S. So there – because their clients have such kind of request and also the service for their client locally, so they have the incentive, and the more the U.S. subsidy to the new building. So that’s why TSMC come here to serve their clients.

But for Taiwan, I just mentioned in Taiwan we have a very huge supply chain in Taiwan that is difficult to duplicate or difficult to replace. That is my view. So we – great to see that TSMC have the new investment in U.S., but we also continue to develop our semiconductor industry in Taiwan, yes.

Mr. Reinsch: Well, with that, time is up. We want to make sure the minister gets to her next meeting. So thank you very much, Minister Wang. And please thank the minister yourselves. (Applause.)

Min. Wang: Thank you again. Thank you. (Applause.)

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