In late August this year, Gong Mingxin, the Secretary-General of the Executive Yuan of the Republic of China (Taiwan), led a delegation for the third time to visit the Czech Republic. With the groundbreaking of TSMC’s German fab in August, Gong Mingxin sees great potential for the Czech Republic to benefit from the semiconductor cluster effect and believes it will shine in the future, becoming a stronghold for Taiwanese companies entering the European market. The Ministry of Economic Affairs is also planning to establish a service center in the Czech Republic to assist Taiwanese companies in establishing a presence there.
Taiwan’s semiconductor industry has always played a pivotal role in the global supply chain. With the escalation of the US-China trade war and the rise of protectionist sentiments, coupled with the COVID-19 outbreak in 2020 leading to a global chip shortage, governments worldwide have realized the strategic importance of the semiconductor industry.
Semiconductors are now considered strategic commodities, and governments are unwilling to be at the mercy of others, eager to develop secure supply chains. The United States, Japan, and Germany have successively courted TSMC, the leading semiconductor foundry. Based on considerations such as market diversification and customer demand, TSMC has actively expanded its overseas footprint and announced the establishment of a fab in Dresden, Germany in August 2023.
Reflecting on the time when TSMC confirmed its investment in Dresden, Gong Mingxin, who was then the chairman of the National Development Council, recalled that it coincided with his second visit to the Czech Republic. He highlighted the potential for the Czech Republic to become a significant supply chain hub.
The deepening exchanges between Taiwan and the Czech Republic can be traced back to August 2020 when the President of the Czech Senate, Miloš Vystrčil, visited Taiwan, making him the first speaker of a non-diplomatic country to do so. His visit and speech at the Legislative Yuan on September 1 demonstrated a high level of goodwill towards Taiwan.
To continue the exchange between democratic countries, Gong Mingxin led a delegation of 66 officials for an economic and trade inspection tour of three countries in Eastern Europe in early 2021. During this visit, multiple memoranda of understanding were signed with the Czech Republic. In 2023, he revisited the Czech Republic to engage in more concrete and detailed discussions on cooperation directions.
During the pandemic, governments worldwide were competing to attract TSMC’s investment. While rumors circulated about TSMC building a fab in Europe, nothing was confirmed for some time.
Gong Mingxin admitted that during exchanges with the Czech Republic, the possibility of TSMC setting up in the country was raised. However, he immediately pointed out the huge financial investment needed to build a fab, which would require substantial subsidies from the foreign government. Moreover, the subsequent maintenance would also be highly demanding, not necessarily a good idea for the Czech Republic.
Setting up a fab in Germany does not mean that all supply chains have to be located there, Gong Mingxin emphasized. From a corporate perspective considering factors such as geographical conditions and infrastructure, Germany may seem superior, but it comes with high costs and labor expenses, making it challenging for small and medium-sized enterprises. In this context, the Czech Republic could be another viable option.
As TSMC establishes its presence in Germany with Dresden as the core, extending towards neighboring countries like Poland and the Czech Republic, the formation of the “chip triangle” cluster has become a hot topic in recent years. Gong Mingxin immediately envisioned a semiconductor cluster blueprint when TSMC’s investment in Germany was confirmed.
Gong Mingxin mentioned that during his visit to the Czech Republic, he swiftly adjusted the agenda with the Czech side upon the formal confirmation of TSMC’s investment plans. He introduced the concept of a semiconductor supply chain cluster to the Czech officials, highlighting the significant advantages of the region.
“One of the simplest reasons is the closer distance between Dresden and Prague (the capital of the Czech Republic) compared to Berlin (the capital of Germany),” Gong Mingxin remarked. Apart from the geographical advantage, there are direct flights between Taiwan and Prague. After arriving in Prague, it takes only 1-2 hours to reach Dresden.
Not only the governments of Taiwan and the Czech Republic but also companies at the forefront of the market have already sensed the business opportunities.
Jiří Drahoš, the Vice Speaker of the Czech Senate, visited Taiwan in June, aiming to promote Taiwan-Czech “chip cooperation” and initiate investment attraction. Gong Mingxin mentioned that he relayed the Czech intention to attract investment to TSMC during that time, hoping TSMC would assist in conveying the message to suppliers. The response from companies attending the investment forum in the Czech Republic was enthusiastic, with not enough chairs available onsite, requiring additional seating arrangements.
Many enterprises expressed interest in investing in the Czech Republic on the spot, indicating a positive outcome that led to Gong Mingxin’s third visit to the Czech Republic. The inspection team expanded significantly, with 16 semiconductor supply chain companies accompanying officials from the National Development Council, the Ministry of Economic Affairs, and the National Science and Technology Center.
During his visit to the Czech Republic this time, Gong Mingxin engaged in in-depth discussions with local government officials in Prague, followed by a hectic schedule visiting potential investment areas. On the second day, he traveled to Ústí nad Labem in the northwest, met with officials from the Czech Ministry of Research and Innovation on the third day, and Taiwanese companies visited Wistron’s factory in Brno in the southeast to learn from the “investment pioneers.” On the fourth day, he visited Kladno.
Gong Mingxin explained that Prague, being the capital of the Czech Republic, boasts the most convenient transportation and facilities, while Brno is known for its robust technology and academic prowess.
Kladno, located east of Prague, is best known for being the site where the Taiwanese conglomerate Hon Hai Group, also known as Foxconn, established its base in the Czech Republic in 2000. The factory is situated in Kladno, where Hon Hai purchased a large tract of land. With business operations expanding, the factory has gradually expanded as well.
As for Ústí nad Labem, it was a coal mining area in the past but has since fallen into decline, appearing desolate. However, Gong Mingxin holds a strong belief in the potential of the area due to its advantageous geographic location. He noted that the proximity of Ústí nad Labem to Dresden is a key advantage, with the journey taking just 40 minutes similar to the distance from Taipei to Taoyuan.
The history of Ústí nad Labem dates back to the World War II era. According to Gong Mingxin, as Germany consisted primarily of Germanic people and the Czech Republic of Slavic people, Ústí nad Labem was initially inhabited by Germanic people. After World War II, the Germanic population was forced to leave. However, since Ústí nad Labem was a coal mining region and predominantly occupied by the middle and lower classes, the Czech people did not favor the area after the departure of the Germanic population, making it somewhat a transitional zone.
In August of this year, with the official groundbreaking of TSMC’s German fab, Ústí nad Labem, long covered in coal ash, has hope to transform and emerge in the next decade, potentially becoming the preferred investment destination for the semiconductor supply chain.
Gong Mingxin highlighted two major advantages of Ústí nad Labem: its proximity to Dresden, Germany, offering exceptional geographical conditions, and the available workforce. He mentioned that with the closing of coal mines in Ústí nad Labem, there will be a continual release of labor. Nonetheless, whether these workers can transition into skilled technology personnel depends on the guidance provided by the Czech government.
The Taiwan government warmly welcomes Czech students to come to Taiwan to study semiconductor technology. There are currently scholarship programs available, such as the Key Technology Student Scholarship Program for the Czech Republic and the International Industry Talent Education Program for global recruitment, which integrates government, industry, and university resources to attract outstanding international students to study and work in Taiwan.
Gong Mingxin expressed that the above scholarship programs welcome Czech students to study semiconductor-related fields in Taiwan, offering not only degrees but also training. He emphasized the importance of a more macroscopic and open-minded approach to semiconductor talent training. Even if these trained individuals return to Europe in the future, they may work at TSMC’s German fab or enter semiconductor supply chain companies, thereby continuing to be partners with Taiwan.
From 2021 to 2024, in the span of four years, Gong Mingxin led three delegations to visit the Czech Republic, witnessing the increasing closeness of Taiwan-Czech relations and the growing interest of Taiwanese companies in investing in the Czech Republic.
With the successful conclusion of this semiconductor economic and trade inspection tour, Gong Mingxin noted that each company has different concerns. Considering that TSMC’s German fab is scheduled to start mass production by the end of 2027 at the earliest, companies are not in a hurry to immediately build and operate factories but rather aim to first establish a presence or start with logistics by building warehouses to familiarize themselves with local resources.
On the other hand, foreign investments involve numerous intricacies. Gong Mingxin pointed out that in Taiwan, everything from water, electricity, infrastructure, and even employee dormitories is all well arranged by the government. However, overseas, these may be lacking or require government intervention to coordinate, making it challenging for private sector entities alone to manage effectively.
Gong Mingxin emphasized that Taiwan’s industrial park experience is a unique advantage that may not be easily replicated in other countries. Nonetheless, considering the long-term development of industrial cooperation between Taiwan and the Czech Republic, the Ministry of Economic Affairs plans to establish a service center in the Czech Republic. This initiative aims to better understand the needs of companies and facilitate more efficient communication between businesses and Czech government investment units.
Furthermore, with the establishment of the service center in the Czech Republic, there will be no need for periodic delegations to visit, and Taiwanese companies interested in investing can consult the service center directly when assistance is required.
Although Ústí nad Labem, located near Dresden, is currently barren, Gong Mingxin believes that based on the past development trajectory of Taiwanese businesses, they excel in pioneering development in underdeveloped regions around the world. Ten or twenty years from now, he envisions that “it will be different without a doubt”.
Gong Mingxin further pointed out that in the past, the focus was primarily on advanced technology in Western Europe with manufacturing operations mainly located in China. However, with global concerns arising regarding Chinese manufacturing, the need to operate in the European market has become imperative. This has opened up opportunities for the Central and Eastern European region.
Gong Mingxin straightforwardly stated that the global restructuring of supply chains and the search for reliable supply chains by democratic countries create a favorable environment for both Taiwan and Central and Eastern Europe. Taiwan already possesses a robust semiconductor industry and with the rise of Central and Eastern Europe in recent years, the friendship bridge established over freedom and democracy between Taiwan and the Czech Republic provides a solid foundation. There is hope for deeper industrial cooperation and market expansion in Europe with semiconductors at the core.
转自中央社 (Source: Central News Agency)