AI and chip budgets under threat in Taiwan

Taiwan’s government faces significant funding challenges for its semiconductor, AI, and aerospace sectors. The science ministry has warned that economic and technology spending could be cut by T$20 billion (£486 million) next year, a move linked to recent legislation passed by opposition parties. The legislation redirects central government funds to local municipalities, drawing criticism from the ruling Democratic Progressive Party and protestors.

Economic partnerships with tech giants such as Micron, AMD, and Nvidia are also at risk. Taiwan’s Ministry of Economic Affairs highlighted concerns about future budgets potentially undermining international collaborations in AI and other advanced technologies. Micron, the island’s largest foreign investor, along with AMD and Nvidia, relies on partial government funding for joint projects.

Projected cuts include a reduction of T$29.7 billion in overall economic ministry spending, with T$11.6 billion specifically targeting technology initiatives. Observers note that the financial constraints could weaken Taiwan’s position in global technology innovation.

Government officials and industry leaders are urging a re-evaluation of spending priorities to safeguard Taiwan’s leadership in key technology sectors.