Experts applaud trilateral semiconductor pact among US, Japan and Taiwan while warning of challenges ahead

Kaohsiung, Arizona and Japan's Kumamoto Prefecture have signed a semiconductor memorandum of understanding, with experts praising the pact while cautioning that cultural and institutional gaps pose the real test ahead.

A trilateral pact anchored in chips

In a move underscoring the growing geopolitical and economic centrality of semiconductors, the southern Taiwanese port city of Kaohsiung recently signed a memorandum of understanding (MOU) with the US state of Arizona and Japan’s Kumamoto Prefecture, forming a three-way partnership aimed at strengthening cooperation in the semiconductor industry.

According to the Kaohsiung City Government, Mayor Chen Chi-mai (陳其邁) led a delegation from Taiwan joined by partners from Japan to travel to the US. He said the city is advancing a forward-looking strategy that aligns closely with top-tier global resources through the MOU.

He described the signing of the MOU as formally establishing a “semiconductor strategic triangle” across the Indo-Pacific, with future collaboration set to deepen across industry, technology, and cross-border talent development, thereby reinforcing global supply chain resilience.

Chen emphasized that the agreement transcends conventional municipal-level industrial linkages, representing instead a trans-Pacific blueprint for supply chain resilience.

With Kaohsiung and Kumamoto serving as key manufacturing hubs in Taiwan and Japan, he said, their strategic partnership with Arizona enhances the stability of advanced processes and signals a shared commitment among democratic partners to safeguarding supply chain security — jointly fostering a highly resilient industrial and economic ecosystem.

Beyond technology: The cultural architecture of cooperation

Yet beneath the institutional language of MOUs and policy alignment, experts caution that the true determinants of success lie elsewhere.

Albert Young, a Cornell-trained Swiss polyglot who previously served as a senior executive at a multinational corporation and now teaches in National Taiwan Normal University’s MBA program, told TCN that cross-cultural collaboration is rarely constrained by language barriers alone. Rather, it hinges on what he calls “connectability” between fundamentally different worldviews.

“Cultural intelligence,” he explained, is a form of cognitive flexibility — the ability to shift between distinct modes of thinking.

Western corporations tend to favor linear, evidence-driven communication, while Asian business cultures place greater emphasis on relationships, hierarchy, and trust-building. Leaders who can navigate between these paradigms are far more likely to generate meaningful value.

Equally critical, he added, is “social empathy” — the capacity to understand how partners perceive risk, success, and responsibility. “International cooperation is not built on contracts alone, but on the alignment of values,” he noted.

Without this deeper resonance, partnerships risk remaining transactional rather than transformative.

Institutional design also plays a pivotal role. Multinational collaborations often falter when parent companies attempt to replicate domestic systems abroad without adaptation.

More resilient models, he said, incorporate pluralistic decision-making frameworks that accommodate diverse perspectives while maintaining shared objectives.

Similarly, Konrad Young (楊光磊), a former R&D director at TSMC, attributed Taiwan’s success to a confluence of historical, geographical, and cultural factors. He told TCN that the island’s industry is a “strong follower” and “leverage learner,” adept at optimizing and scaling technologies while remaining a harmless enabler within the global ecosystem.

Japan, he noted, remains formidable in material supply and semiconductor equipment hardware. Without specifically commenting on the MOU, he said that both Taiwan and Japan need to pay attention to potential talent shortages and generational shifts that may challenge traditional management paradigms and organizational culture.

Taiwan’s strategic leverage in a fragmenting world

Jeremy Wang (王智立), an industry veteran in semiconductors who also served as the director general of the Department of Administrative and International Affairs at Kaohsiung City Government, told TCN that chips are the “engine of a US$100 trillion global economy,” underpinning sectors ranging from AI, 5G, IoT to electric vehicles, fintech, and aerospace.

Without commenting specifically on the MOU, he said increased international cooperation is desirable, particularly given the susceptibility of semiconductor supply chains to geopolitical disruptions.

Albert Young told TCN that Taiwan should not be viewed merely as a semiconductor supplier, but as a “high-leverage strategic node” within the global economy. Its core strength lies in trust — manifested through strong rule of law, intellectual property protections, and transparent business practices.

In an era where technological competition is increasingly intertwined with national security, such institutional reliability is becoming as valuable as technical expertise.

“For American companies, understanding Taiwan,” he argued, “means understanding a system-level asset that enhances American supply chain resilience.”

He further highlighted Taiwan’s unique capacity for vertical integration, which enables rapid iteration from design to manufacturing. For US firms, deeper engagement with Taiwan’s ecosystem could significantly shorten innovation cycles and reduce development risks.

Ultimately, he envisioned a shift from traditional supplier-buyer dynamics toward co-creation. He stated that as the MOU deepens US-Japan-Taiwan collaboration, young Taiwanese talent should evolve from problem-solvers into problem-definers, cultivate a cross-disciplinary “big picture” perspective, and strengthen the ability to communicate complex technologies into clear, compelling narratives.

Strategic realities from the perspective of Taiwan

Jeremy Chang Chih-cheng (張智程), CEO of Taiwan’s national think tank DSET, who holds a doctorate from Kyoto University and has served as a visiting postdoctoral research fellow at Harvard University, framed the current moment as a historic inflection point driven by the global AI boom.

He said during an interview with PIVOT, a leading Japanese business media outlet, that while China had long been Taiwan’s largest export market, the US has recently regained that position due to the AI boom, reflecting shifting economic dependencies.

At the same time, Taiwanese manufacturers are increasingly being encouraged to establish operations in the US, he said. However, he cautioned that Taiwan’s semiconductor ecosystem— built over a long period through dense networks of suppliers, talent, and tacit knowledge — cannot be easily replicated abroad.

“Not in the US, and not in Japan,” he said. “Costs in the United States are significantly higher,” he added. “That is why, even as firms expand overseas, they are simultaneously accelerating investment and expanding capacity at home.”

This dual-track strategy — global expansion alongside domestic consolidation — highlights the inherent tension between geopolitical diversification and industrial efficiency.

Local voices: Growth, but for whom?

On the ground in Kaohsiung, the implications of such high-level agreements are felt unevenly.

Su, a Kaohsiung native now working in the life insurance sector outside the city, describes a hometown transformed — its industrial base expanding alongside a burgeoning cultural scene, improved urban governance, and increasing global visibility. “It’s not just about the technology,” she told TCN, “Finance, entrepreneurial activities, international concerts, arts and culture are also thriving in Kaohsiung.”

Sun, a high school teacher based in Kaohsiung, offered a more tempered view. While acknowledging the city’s progress and the government’s endeavors, she told TCN that educators and civil servants often see little direct benefit from economic growth, highlighting disparities in how prosperity is distributed.

For younger Gen Z professionals like Tzeng, the stakes are more immediate. Having worked across multiple industries, she told TCN that the MOU is a positive development but emphasized that its true value lies in job creation.

She said her family welcomes the possibility that her brother — currently employed at a globally renowned semiconductor company’s facility in Tainan, another southern city in Taiwan — could move back to their hometown of Kaohsiung for work.

“The key is talent,” she said. “People want real opportunities, not just macroeconomic growth.”

She added that for many in Kaohsiung, the promise of the semiconductor “strategic triangle” will ultimately be measured by whether it can create jobs and counter the long-standing phenomenon of “drifting north” — a term describing the outflow of young talent to Taipei.

A partnership still taking shape

As Kaohsiung, Arizona, and Kumamoto formalize their cooperation, the agreement represents both a symbolic alignment and a practical step toward deeper integration in the semiconductor sector.

Yet as experts and local voices alike suggest, the success of this trilateral partnership will depend less on formal agreements than on the ability to reconcile cultural differences, design inclusive institutions, and translate strategic vision into tangible outcomes.