# Taiwan holds the key to US AI dominance > America cannot win the artificial intelligence race with China without Taiwan's semiconductor manufacturing and server production capabilities. - Title: Taiwan holds the key to US AI dominance · Foreign Affairs - Summary: America cannot win the artificial intelligence race with China without Taiwan's semiconductor manufacturing and server production capabilities. Taiwan's… - Keywords: taiwan, united states, artificial intelligence, semiconductors, china, technology competition, tsmc, supply chain, manufacturing, us-taiwan partnership, world, politics - Source: Foreign Affairs — https://foreignaffairs.com/taiwan/americas-ai-ambitions-depend-taiwan - Author: Lin Chia-lung - Published: 2026-11-03T05:00:00+00:00 - Read time: 4 min - Topics: taiwan, united states, artificial intelligence, semiconductors, china, technology competition, tsmc, supply chain, manufacturing, us-taiwan partnership, world, politics ## The AI race is about more than models The United States and China compete for artificial intelligence dominance. The US leads in model sophistication, but winning requires advantage across energy, chips, infrastructure, models, and applications. ## Taiwan makes the chips America needs Taiwan produces more than ninety percent of the world's most cutting-edge semiconductors and assembles roughly ninety percent of servers powering the global AI economy. The US cannot win without Taiwan. ## A partnership, not a replacement Taiwan did not weaken the US semiconductor industry. Instead, Taiwan has been crucial to maintaining US technological superiority through decades of collaboration and division of labor between Washington and Taipei. ## How Taiwan became a chip powerhouse Taiwan's semiconductor industry was born from US-Taiwanese cooperation. Taiwan's government established the Industrial Technology Research Institute, bought technology licenses from the United States, and built Hsinchu Science Park in northwestern Taiwan. ## The ecosystem that freed Silicon Valley Taiwan invested heavily in engineer education and training. Large firms like TSMC expanded operations while small and medium enterprises contributed to supply chains, creating a specialized ecosystem difficult to replicate elsewhere. ## US design, Taiwan manufacturing The United States leads in semiconductor innovation, design, and research and development. Taiwan leads in advanced manufacturing, packaging, and supply chain integration. US firms like Nvidia, Apple, and Qualcomm need Taiwan to build their ideas. ## Taiwan invests billions in US capacity TSMC has committed to investing two hundred sixty-five billion dollars in semiconductor fabrication plants in Arizona. More than twenty other Taiwanese companies have invested billions in the US semiconductor ecosystem. ## Taiwan's server manufacturing dominance Taiwanese companies manufacture the AI servers on which US platforms and cloud services run.Foxconn accounts for approximately forty percent of the world's AI server market.Quanta Computer builds high-density AI servers for major US technology companies. ## US cannot match Taiwan's scale alone The United States could expand AI manufacturing capacity, but it would take many years to match Taiwan's scale, supplier networks, engineering expertise, and manufacturing capabilities. Taiwan can manufacture infrastructure faster and cheaper. ## AI's next frontier: real-world applications The United States and China race to fuse AI with robots, drones, and defense systems, and to integrate it into manufacturing, healthcare, and transportation.Robotic taxis operate in San Francisco and Shenzhen.Companies jockey for leadership. ## Taiwan's hardware powers physical AI Taiwan's semiconductor, communications equipment, and precision machinery industries will build physical systems using American AI models. Thunder Tiger develops AI-driven defense drones. Taiwan's hardware production base will become even more valuable to the United States. ## AI competition is about values too As the AI race intensifies, it becomes a contest over values, data management, and trust. The United States and democratic allies must work together to create secure and trustworthy AI ecosystems reflecting their principles. ## No single country can dominate AI alone The United States excels in innovation. Japan leads in specialized refining and precision semiconductor equipment. The Netherlands supplies advanced lithography machines. Taiwan specializes in wafer fabrication and packaging. Only coordination builds secure supply chains. ## Disruptions demand democratic cooperation The COVID-nineteen pandemic, Russia's invasion of Ukraine, and Middle East instability exposed global supply chain weaknesses. In two thousand twenty-five, Taiwan proposed a global semiconductor democratic supply chain partnership initiative to build reliable systems. ## US-Taiwan technology cooperation deepens The US-Taiwan Economic Prosperity Partnership Dialogue, inaugurated in November two thousand twenty, hosts high-level discussions on AI supply chain security, digital infrastructure, critical minerals, drone supply chains, and high-tech talent. ## Taiwan ensures safe, ethical AI Safety depends on AI model makeup and hardware security and reliability. Taiwan can bring expertise to increase cybersecurity, establish testing standards, and build reliable manufacturing systems ensuring AI develops safely and can be trusted by… ## Taiwan is America's most trustworthy partner Taiwan is not an adversary of the United States but its most trustworthy partner in artificial intelligence.Taiwan has the capability, reliability, and values to support US technological ambitions.Taiwan is indispensable to US AI competition. > Taiwan is not an adversary of the United States but its most trustworthy partner. ## Key takeaway Taiwan's dominance in semiconductor manufacturing and server production makes it essential to US artificial intelligence competitiveness against China.