Senate panel approves bill granting $4.5B for Taiwan security

This story was updated with comments from Sen. Warner and  Keith Krach, former Under Secretary of State

The US Senate Foreign Relations Committee voted 17-5 in favor of the Taiwan Policy Act on Wednesday, a measure granting $4.5 billion in security assistance over four years to Taiwan as China increases military pressure on the island.

Taiwan is home to several chip fabs including the largest contract manufacturer globally, TSMC, which makes chips for Apple and other companies as well as the most advanced chips deemed crucial to future work in AI.

Worries that China could invade Taiwan and cut off access to semiconductor trade have dominated discussions about the separate CHIPS Act in recent months, which provides $52 billion to support domestic production of semiconductors.  At least seven large manufacturers including Intel and Micron have promised more than $100 billion in US fab construction in several states, but these new fabs will take years to reach completion before they begin pumping out billions of shiny microchips.

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“If all the chips built in Taiwan were suddenly cut off, it would be an economic catastrophe,” Sen. Mark Warner, D-Virginia, recently declared. Warner does not serve on Foreign Relations but heads the Intelligence Committee and co-authored the early version of the CHIPS Act.  

Later, Warner told Fierce Electronics: “As the PRC escalates its aggression and intimidation tactics toward Taiwan, I believe it’s important for the US Congress to continue showing our support for Taiwan and assisting it to defend itself – a longstanding aspect of U.S. policy.”

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Supporters of the Taiwan Policy Act  expressed broader concerns than chips saying they want to protect the rights of Taiwan beyond economics.  “The bill…makes clear the United States does not seek war or increased tensions with Beijing,” said Foreign Relations Chair Bob Menendez, D-New Jersey. “Just the opposite.  We are carefully and strategically lowering the existential threats facing Taiwan by raising the cost of taking the island by force so that it becomes too high a risk and unachievable." He authored the act with Sen. Lindsey Graham, R-South Carolina, and support on the committee was bipartisan.

Menendez published an op-ed in the New York Times in August citing unity among democratic nations against Russia’s invasion of Ukraine and House Speaker Nancy Pelosi’s visit to Taiwan in his case for safeguarding Taiwan’s democracy.

 “China has been increasingly aggressive in its moves to change the status quo in its relationship with Taiwan, which would inherently alter the US relationship with Taiwan and China,” said Sen. Ben Cardin, D-Maryland, a supporter of the Taiwan measure. “For this reason, we must be stronger and less opaque in our support for the people of Taiwan.”

One of the five no votes was cast by Sen. Ed Markey, D-Massachusetts, who worried provisions in the Act could undermine the US One China Policy “and threaten to destabilize the region…We should not take actions that put Taiwan at increased risk, with little reward.”

The other four no votes were cast by Senators Ron Paul, R-Kentucky, Brian Schatz, D-Hawaii, Chris Van Hollen, D-Maryland, and Chris Murphy, D-Connecticut. The 17 in favor included seven Democrats and 10 Republicans.

A spokesperson for the Chinese Embassy in the US told The Hill the Taiwan Policy Act would “systematically undermine the One China principle,” adding that if the Act passes into law “it will have a subversive impact on China-US relations and send a gravely wrong signal to the ‘Taiwan independence’ separatist forces. We are firmly opposed to this.”

TSMC alone makes about half of all semiconductors globally, and makes 5nm chips with production in the works for 3nm chips, primarily at its Fab 18 location. TrendForce said more than 60% of all chips are made in Taiwan by TSMC, UMC, PSMC and VIS.  China is a large consumer of chips, but only makes 6% with SMIC of China making 5%.

Advocating for Taiwan 

While some lawmakers and the White House favor the One China Policy, other voices have called for Taiwan independence, including Keith Krach, former Under Secretary of State in the last two years of the Trump administration. 

“Taiwan is not a part of the People’s Republic of China. In the same way the United States played a lead role in ‘unrecognizing’ Taiwan as a country, it can play the role of lead domino for its recognition as well,” he said.

 "The decision by the Senate Foreign Relations Committee represents a bipartisan and unified approach to standing with Taiwan and sending a strong message to General Secretary Xi that any conceivable attack on Taiwan will be disastrous for him. And if there’s one thing Xi fears, it’s a united United States," Krach said in an email to Fierce Electronics.

"As one of the world’s most technologically advanced democracies, Taiwan’s government, its businesses, and its people are integral to creating an international security blanket against threats from authoritarian regimes—China’s foremost among them," Krach added. "That’s why it’s critical for democracies around the world, especially techno-democracies, to deepen economic, scientific, and certainly technological ties with Taiwan. This would not only help protect this linchpin democracy from external threats but benefit the free world."