How Taiwan Is Betting Big On AI To Power Its Economy

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) saw its stock recover some losses on Wednesday after closing lower on Tuesday. This rebound comes as the company continues to benefit from robust demand for artificial intelligence (AI) technologies and Taiwan unveils ambitious plans to bolster its position as a global AI powerhouse.

Taiwan’s Strategic Push into AI

Taiwan has launched its “Ten Major AI Infrastructure Projects,” an initiative designed to inject over 15 trillion New Taiwan dollars (approximately $510 billion) into its economy by 2040, Reuters reported on Wednesday.

This strategic move aims to leverage the island’s established strengths in the information and communications technology (ICT) sector and its world-leading semiconductor industry to become a dominant force in the global AI landscape.

Also Read: Taiwan Semiconductor Plans Four New Fabs As AI Gold Rush Continues

At the heart of this initiative are three core technologies identified as strategic pillars: silicon photonics, quantum technology, and AI robotics.

Silicon photonics, a key area of focus for Taiwan Semiconductor and other industry leaders, is crucial for integrating chip innovation with the evolving demands of AI.

To cultivate a strong local ecosystem for AI robotics, Taiwan has also established the AI Robotics Industry Grand Alliance, with the backing of Foxconn Chairman Young Liu.

Furthermore, the government intends to build a comprehensive quantum technology supply chain, enhance sovereign AI capabilities, expand computing infrastructure, and ensure that AI development is balanced across all regions of the island.

To accelerate this transformation, the government will invest over 100 billion New Taiwan dollars ($3.08 billion) in AI-focused venture capital, aiming to create 500,000 jobs and establish three world-class research laboratories.

Stargate Project Setbacks Trigger Dip

Shares of Taiwan Semiconductor and its chipmaking peers, including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), and Qualcomm (NASDAQ:QCOM), fell on Tuesday after reports revealed deep internal conflicts between OpenAI’s Sam Altman and SoftBank’s (OTC:SFTBY) Masayoshi Son derailed the ambitious $500 billion Stargate AI project.

The feud stalled progress, slashed the project’s scale to one smaller Ohio site, and triggered investor concerns, dragging down semiconductor stocks worldwide.

Price Action: TSM stock is trading higher by 1.19% to $237.40 premarket at last check Wednesday.

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