Taipei: Taiwan ranks as the European Union’s fourth-largest trading partner in Asia, supplies more than 90 percent of the world’s most advanced logic chips, and has no bilateral investment agreement with Brussels. That combination is not an accident of scheduling. It is a choice the Union has made repeatedly, and the cost of it is starting to show in the terms European firms get.
Semiconductors accounted for roughly 23 percent of Taiwanese exports to the Union in 2024. The flow runs both ways: European suppliers sell Taiwan the lithography systems, chemicals and metrology equipment that make advanced nodes possible. ASML alone gives the Netherlands leverage in this relationship that no amount of subsidy would buy. Yet the legal scaffolding around Taiwan chips remains thinner than what Brussels maintains with partners it trades far less with.
The reason is China, and everyone involved says so in private. Beijing treats any bilateral instrument signed with Taipei as a status question rather than a commercial one, and member states with exposed export markets have blocked movement whenever the Commission tested the water. The 2023 Europe-Taiwan Semiconductor Industry Dialogue and the ministerial-level Trade and Investment Dialogue were the compromise: real meetings, real technical work, no treaty.
Central Europe has stopped waiting. Czech, Polish and Slovak agencies have built government-backed research centres, talent programmes and supplier localisation schemes aimed squarely at Taiwanese firms, and Taiwanese money has followed into packaging, testing and design services rather than into leading-edge fabrication. Prague did not need a Union-level agreement to do any of this. It needed a decision, and it made one.
The European Chips Act was supposed to change the arithmetic. Its target of doubling the Union’s share of global production to 20 percent by 2030 always depended on partners bringing capacity, and TSMC’s Dresden venture is the single most visible result. One fabrication plant does not build an ecosystem. The suppliers, packaging houses and specialist toolmakers that cluster around Taiwanese fabs in Hsinchu have not relocated, and they will not relocate for a plant that has no legal certainty about its inputs.
An investment agreement would not solve the physics of chip manufacturing, but it would change three things that matter to boards. It would give European investors in Taiwan predictable treatment and dispute resolution. It would let Taiwanese firms plan European expansion against something more durable than a subsidy cycle. And it would remove the quiet discount Taiwanese negotiators apply when they weigh a European partner against an American or Japanese one that operates under a signed framework.
Brussels has time to reconsider, though not much of it. Washington has spent two years pulling advanced capacity onto American soil with a mix of tariffs and incentives, and Japan has moved decisively on Kumamoto. Every quarter the Union spends deciding whether a technical dialogue counts as policy is a quarter in which the marginal Taiwanese investment goes somewhere else.
The uncomfortable truth is that Taiwan’s leverage is temporary. If the Union waits until Taiwanese primacy in advanced nodes erodes, it will finally be free to sign an agreement, and the agreement will be worth considerably less.
