Dear President Trump, You Are Mistaken

May 25, 2026, 10:37 p.m.

By Jyh-huei Kuo

US President Donald Trump recently repeated his claim that “Taiwan stole America’s chip industry,” reigniting public debate on the issue.

As a former Taiwanese minister of economic affairs and an entrepreneur deeply involved in semiconductor supply chain development, I feel a responsibility to clarify this misunderstanding.

From the perspective of global industrial evolution and the economic principle of comparative advantage, such a statement appears overly simplistic and risks obscuring the essence of the issue.

The rise of Taiwan’s semiconductor industry was not built on “replacing America,” but rather emerged as a result of countries pursuing different development paths within the framework of global industrial specialization.

According to international economic theory, no country can maintain a competitive edge in every sector.

Instead, nations allocate resources toward industries where they possess the greatest efficiency and strategic advantages. This is precisely the fundamental concept of comparative advantage.

Over the past several decades, the US has consistently played the role of a global leader in technological innovation.

From semiconductor science and electronic design automation design tools to core intellectual property, chip architectures, system design and software ecosystems, the US has firmly controlled the most critical upstream segments of the technology value chain.

The strategy of US companies has long been clear: Concentrate resources on research and development, innovation and brand value, while gradually outsourcing manufacturing — which requires substantial capital investment and labor intensity — to emerging economies and regions. This was not a forced retreat; it was a strategic decision based on comparative advantage.

Recognizing Asia’s strengths in manufacturing costs, labor resources and operational efficiency, US firms helped shape an international division-of-labor model.

Within this framework, Taiwan, Japan, South Korea and later China each assumed important manufacturing roles across different segments of the technology industry.

Taiwan did not acquire semiconductor capabilities out of thin air.

During the 1970s, Taiwan introduced technology from the now-defunct American RCA Corp through Taiwan’s Industrial Technology Research Institute, establishing its technological foundation.

Over the following decades, Taiwan invested heavily in talent cultivation, process optimization, supply chain integration and industrial cluster development, gradually building the competitive position it holds today.

The key factor was not simply acquiring technology; it was continuous improvement.

Semiconductor manufacturing is not merely a matter of following a circuit blueprint and producing chips accordingly.

It is an industry that demands extraordinary discipline, precision management and sustained long-term investment. A one-percentage-point improvement in yield rates, or a one-generation lead in process technology, can create enormous competitive advantages.

There are no shortcuts in this industry, and it is inaccurate to summarize such a complex process with the word “steal.”

The US did not lose the semiconductor industry; rather, it redefined its role within it.

Even today, many of the world’s most critical technologies — including chip design, operating systems, artificial intelligenc (AI) architectures, semiconductor equipment and advanced materials — remain largely under US leadership. US companies continue to occupy the commanding heights of the global technology value chain.

In recent years, geopolitical shifts and supply chain disruptions during the COVID-19 pandemic prompted the US to reconsider an important question: Has the relentless pursuit of efficiency weakened manufacturing resilience and potentially threatened national security?

This has led to active industrial policies encouraging manufacturing reshoring. The purpose is not to reject globalization or international specialization, but rather to rebalance the relationship between efficiency and security.

Therefore, Taiwan’s achievements in semiconductors should not be mischaracterized as having “replaced” or “taken away” someone else’s industry.

What should be emphasized instead is that Taiwan, through decades of investment, professional capability and industrial resilience, has established a position that is difficult to replicate.

Industry is not a zero-sum game.

Taiwan’s success does not imply another country’s failure. More accurately, the US chose innovation, while Taiwan chose manufacturing; the US created technological value, while Taiwan realized technological value.

Together, Taiwan and the US built one of the most successful collaborative models in the history of the global technology industry.

The challenge today is not to revisit arguments about who once owned which industry. The more important question is: Who has the ability to shape the future, define the rules and lead the next wave of global industrial transformation?

The semiconductor industry has already demonstrated the power of complementary strengths.

With continued collaboration, Taiwan and the US can together create the next era of technological prosperity.

Jyh-huei Kuo is a former minister of economic affairs and the founder of TOPCO Group.