U.S. President Joe Biden’s order to secure semiconductor supply chains for high-tech hardware production offers a commercial boost to Taiwan, one of the world’s biggest providers of chips, and gives Taipei new weight in any free-trade talks, analysts say.Biden signed an executive order Feb. 24 for the United States to start overcoming a chip shortage that has hobbled the manufacturing of vehicles, consumer electronics and medical supplies. It will trigger a review process leading to policy recommendations on how to bolster supply chains.Taiwan comes into play as the home of Taiwan Semiconductor Manufacturing Co., which spins out more chips than any other contract manufacturer in the world and has some of the most advanced production processes. Those advances generate semiconductors that run on relatively little power without sacrificing the speed of a device.Remote study and telework, two trends that exploded during the 2020 coronavirus outbreak, raised demand last year for chips that run notebook PCs, among other types of consumer hardware. World demand for chips should increase from $450 billion last year to about $600 billion in 2024, market research firm Gartner says.“This is good, and I think at this moment Taiwan finally can offer something concretely and to help the United States somehow, some way,” said Liu Yih-jiun, public affairs professor at Fo Guang University in Taiwan.Taiwan has tried off and on since 1994 to arrange a trade deal with the United States, which is its second-biggest trading partner after China. U.S.-Taiwan trade totaled $90.9 billion in 2020. Americans buy chips, computers and machinery, among other Taiwanese goods, resulting in a $29.3 billion trade surplus for the Asian manufacturing center last year.Starting in January, Taiwan began allowing shipments of American pork from pigs raised on the feed additive ractopamine, and U.S. officials lauded that step as progress in trade relations.The Biden administration has asked Taiwanese officials about pushing their chipmakers to step up semiconductor production amid a shortage of chips for automotive use, Bloomberg reported last month.American demand for semiconductors will help raise Taiwan’s position when negotiators meet again for trade talks, said John Brebeck, senior adviser at the Quantum International Corp. investment consultancy in Taipei.“Because of the [Sino-U.S.] trade war, and because of semiconductors, and because Taiwan did so well on COVID, and it’s a democracy they want to support, I think it moves forward,” Brebeck said.Trade talks will take place “in a much more balanced way” due to Taiwan’s weight in global semiconductors, Liu said.Trade deal or not, Taiwan’s chipmakers will get a surge in business because of the shortage, though they may struggle to prioritize customers, Brady Wang, an analyst in Taipei with the market intelligence firm Counterpoint Research, said.“There’s actually no risk to the companies, but you can say there’s the issue of how much they can spread out production and who they’re going to sacrifice,” Wang said.Taiwan Semiconductor Manufacturing Co. broke ground in 2018 on a $15 billion factory complex in Taiwan with volume production expected to reach full capacity this year. The complex will produce more than 1 million wafers per year and employ about 4,000 people. In December last year the 34-year-old firm got Taiwan government clearance to build a $12 billion factory in the U.S. state of Arizona. That plant will make up to 20,000 wafers per month.The project in Arizona and the new one in Taiwan are “well on track,” a spokesperson from the company’s headquarters said.Powerchip Semiconductor Manufacturing Corp. and United Microelectronics Corp. also make chips in Taiwan. A spokesperson for United Microelectronics said last month his company was doing all it can to meet demand for automotive chips.

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