Taiwan to focus on silicon photonics, build new economic shield

Taipei, April 16 (CNA) Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, head of the National Development Council (NDC) Liu Chin-ching (劉鏡清) said Wednesday.

Speaking at a hearing of the Legislative Yuan's economics committee, Liu said Taiwan already has the artificial intelligence industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields.

While Taiwan will further strengthen its existing shields, Liu said, over the longer term, the country is determined to focus on such potential segments as silicon photonics to boost its competitive edge and take a larger share of the global market, Liu added.

Silicon photonics is known as the applications of photonic systems using silicon as a medium for optical transmission, which has some promising features, such as low power consumption, extensive transmission distance, and lower costs.

At a time when AI applications are booming, finding ways to cut energy consumption has become a focus.

Eyeing a stake in the silicon photonics supply chain, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and Taiwan-based IC packaging and testing services provider ASE Technology Holding Co. organized the Silicon Photonics Industry Alliance (SiPhIA) in September 2024. The group is comprised of more than 30 Taiwanese tech companies.

TSMC also teamed up with U.S.-based AI chip designer Nvidia Corp. in silicon photonics development in January, though Nvidia founder and chairman Jensen Huang (黃仁勳) has said the two sides still need several years to achieve concrete outcomes.

In addition to silicon photonics, Taiwan has also listed quantum and autonomous robot development as additional potential economic shields for the country, Liu said.

Among Taiwan's tech heavyweights, Hon Hai Precision Industry Co, the world's largest electronics maker, has entered quantum and robotics development as it seeks to transform itself from a pure contract manufacturer into a company that can integrate hardware and software capabilities.

On Monday, Nvidia announced it will partner with TSMC, Hon Hai, Wistron Corp., another Taiwanese AI server supplier as well as American IC packaging and testing services provider Amkor Technology Inc. and its Taiwanese counterpart Siliconware Precision Industries Co. (SPIL) to build facilities in the United States to produce the first-ever U.S.-made AI supercomputers.

According to Nvidia, it plans to produce up to US$500 billion of AI infrastructure products in the U.S. through its manufacturing partnerships over the next four years.

Commenting on the Nvidia move, Liu said he saw tremendous business opportunities for Taiwanese companies, adding through cooperation, Taiwan and the United States are expected to build closer business ties.

In the wake of tariff threats from the Trump administration, Liu said, Taiwanese companies are expected to face more challenges but the government will provide necessary assistance to assist their efforts at global expansion to navigate the headwinds.

According to Liu, the U.S. accounts for 13.4 percent of the total imports in the global market and Taiwan should target the remaining 86.6 percent.