TEMPO.CO, Jakarta - Taiwan's Foreign Minister Lin Chia-Lung stated that Indonesia has the opportunity to become a significant partner for Taiwan in the development of the semiconductor industry in Southeast Asia. However, this opportunity is contingent upon Indonesia's position in viewing Taiwan as an equal partner, especially amid the increasing interconnectivity between technology, economy, and global security.
Lin stated that the strategic planning of the semiconductor industry in Southeast Asia has been underway, with Taiwan already establishing collaborative efforts with Vietnam and the Philippines.
"Indonesia, with its large population and tremendous market potential, is highly suitable to join this framework," Lin said in an online interview with Tempo on Friday, January 9, 2025.
He added that Indonesia needs to exhibit an attitude that views Taiwan as an equal partner. "Only then can Taiwan's expertise and training resources be shared to facilitate the advancement of Indonesia's industry," he added.
Technology, Security, and Supply Chain
Lin assessed that the changing geopolitical landscape makes the old approach, relying on China for the economy and the United States for security, no longer relevant.
"We must confront the close interconnection between the economy and security," he stated. In this context, advanced technology, including semiconductors and artificial intelligence (AI), becomes a factor in the global power balance.
He referred to the United States' supply chain resilience strategy through the CHIPS and Science Act during President Joe Biden's administration, which included Indonesia in the supply chain resilience map. "Including Indonesia, Vietnam, and the Philippines, these three countries are our cooperation partners from the American perspective," Lin said.
Lin believes that Taiwan can play a role for Indonesia to participate in the semiconductor supply chain. "I think Taiwan can play a very important role as a bridge for Indonesia to participate," he stated.
Impact of US-China Rivalry
According to Lin, the strategic rivalry between the United States and China makes maintaining a neutral position difficult, especially regarding technical standards and supply chain systems. He mentioned President Donald Trump's visit to ASEAN last October.
This situation has prompted countries in the region to choose cooperation with the United States, through non-red supply chains (not relying on China) or supply chains still reliant on China.
"So we face a difficult choice. But we must choose between the United States and China in terms of strategic competition in new technology fields," he said.
Security Conditions and Technology Transfer
Lin stated that Taiwan is willing to organize a mission to assist ASEAN countries in evaluating the industry and enhancing capacities, especially talent training, as an initial step in entering the semiconductor supply chain.
However, this cooperation requires mutual trust and specific security standards.
"Due to security concerns, Taiwan cannot engage in full technology transfer with partners highly dependent on non-democratic countries or those that allow red supply chains to penetrate their systems," Lin said.
After meeting the standards of democratic cybersecurity, he believes Taiwan and Indonesia can start substantive cooperation. "I highly recommend Indonesia to partner with Taiwan in developing new industries in the advanced technology sector," he added.
Nevertheless, Lin pointed out that Taiwan's economic connections with Indonesia still lag behind those with India.
"Major Taiwanese companies, including Foxconn and PSMC, have invested in India, and India has become a reliable supply chain partner," he said. According to Lin, Indonesia still faces challenges regarding regulatory transparency and central-to-regional policy coordination.
Taiwan is currently a hub in the global semiconductor supply chain. As reported by the International Trade Administration, Taiwan accounts for over 60 percent of global semiconductor factory revenue and over 90 percent of advanced chip production.
In 2024, Taiwan's semiconductor industry generated revenue of over US$165 billion, approximately 20.7 percent of the country's gross domestic product.
Read: Kadin Indonesia Urges Review of Regional Transfer Cuts
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