TAIWAN’S companies invested a record amount of money in the US and Japan last year while the figure for China stagnated – highlighting supply-chain shifts resulting from tech rivalries and worsening cross-strait ties.
Flows into the US reached US$14.1 billion in 2024, driving total Taiwanese foreign direct investment to US$48.6 billion, both record highs, according to Bloomberg News calculations based on a statement from the Economic Ministry. The ministry on Wednesday (Jan 15) linked the surge to Taiwan Semiconductor Manufacturing Company’s (TSMC) overseas investments, such as for a plant in the US state of Arizona.
Firms’ expenditures going into Japan, Canada and Singapore also hit records. In contrast, new investments into China rose only slightly to US$3.65 billion last year. They accounted for only 7.5 per cent of companies’ total overseas spending – the lowest in data going back to 1991.
The figures come as the Biden administration offers firms such as TSMC grants and loans to start production in the US to revitalise American chip manufacturing. Taiwan companies are also looking to invest in the US to reduce tensions and avoid any tariffs from the incoming US administration.
A server subsidiary of Taiwanese firm Hon Hai Precision Industry announced on Wednesday it spent US$128 million to buy land in California.
Underscoring the tech divide between Washington and Beijing, on Tuesday, the US finalised a rule that effectively bans new personal smart cars from China and Russia. The administration also unveiled a long-awaited executive order on artificial intelligence (AI), opening the door to leasing federal land for companies that agree to build massive AI data centres.
Also, relations between China and Taiwan worsened since May last year, when President Lai Ching-te took over as president of the democracy of 23 million people. China views Lai as a “separatist” undermining its goal of bringing the two sides together and has repeatedly ordered major military exercises around the main island to intimidate his government. BLOOMBERG
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