Collaborative innovation of cross-strait AI hardware in the face of technological blockade: Research on the cooperation model of Kinmen AI Computing Power Center

Sat, 20 Jan 2024 00:00:00 +0000

1. Introduction

1.1 The international background of the US blockade on AI chip technology and its impact on both sides of the Taiwan Strait

In today’s global economic system driven by technological innovation, artificial intelligence (AI) and semiconductor technology are undoubtedly at the forefront of the times. However, in recent years, the U.S. government has implemented a series of technological blockades and export control measures against China in these advanced fields based on geopolitical considerations and technological competition. This situation not only poses a direct challenge to China’s scientific and technological development, but also triggers attention and thinking about potential changes in the global scientific and technological innovation pattern. Especially in the field of AI chip technology, the United States has imposed strict export restrictions on leading companies including Nvidia and AMD starting in 2022 on the grounds of national security, preventing these companies from selling their most advanced AI chips to China. These chips are critical to the development of artificial intelligence because they provide the foundation for high-performance computing and are integral to applications such as big data analytics and smart manufacturing. The blockade measures demonstrate the United States’ firm stance in maintaining its technological hegemony and its determination to curb the rapid rise of China’s technology. The impact of this blockade on China is profound. It not only suppresses the technological innovation capabilities of Chinese enterprises, but also affects important development strategies promoted by the Chinese government, such as the “Manufacturing 2025” plan. In order to cope with these restrictions, China has to find alternative sources of technology or accelerate independent research and development of relevant domestic technologies.

1.2 Kinmen’s unique role in this pattern

For Taiwan, the U.S. blockade policy means both opportunities and challenges. As an important player in the global semiconductor manufacturing industry, Taiwan has access to these advanced technologies and has the ability to produce high-end AI chips. This advantage gives Taiwan the potential to become the mainland’s partner in breaking through the technological blockade. In particular, due to Kinmen’s special geographical location close to the mainland, the author proposed the idea of establishing an AI computing power center in Kinmen, and proposed the Kinmen AI computing power center as a possible cooperation platform to solve the challenges brought by the technological blockade. This not only has far-reaching significance for the development of cross-strait relations, but also provides a new perspective on global technological innovation trends.

In the current global technological competition, Taiwan’s role in facing the complex international technological landscape is particularly unique. Taiwan has always been an important base for the global semiconductor industry. It has a place in the world with its advanced process technology and chip design capabilities. In recent years, with the United States’ blockade of AI chip technology in mainland China, Taiwan’s strategic importance has been further pushed up.

Since Taiwanese companies can legally obtain and produce these high-end AI chips that are restricted in the mainland, Taiwan has become a potential partner of the mainland in this regard. This situation has opened up new possibilities for cross-strait cooperation in the high-tech field. Through such synergy, it will not only alleviate the mainland’s development bottlenecks in specific technology categories, but also help maintain Taiwan’s status and economic interests in the global semiconductor industry.

Kinmen has become an ideal place for such cooperation due to its geographical and historical particularities. As a frontier island on both sides of the Taiwan Strait, Kinmen is located in the Taiwan Strait, across the sea from the mainland. It has a strong cultural background in southern Fujian and is politically under the jurisdiction of the Taiwan region. Its unique geographical location allows it to play the role of a cross-strait bridge in politics, economy and culture. It is not only a link for exchanges between people on both sides of the strait, but also a potential window for scientific and technological cooperation.

Against the background of the US blockade of AI chip technology, the proposal to establish an AI computing power center in Kinmen can be regarded as a strategic deployment. Such a center will take advantage of Taiwan’s technological advantages and Kinmen’s geographical advantages, aiming to form a new model of scientific and technological cooperation. The Kinmen AI Computing Center can not only provide necessary computing resources and technical support to the mainland, but also create new economic growth points for Taiwan and enhance its influence in international technology competition.

However, the establishment and operation of this cooperation model will face many challenges, including technology transfer, intellectual property protection, political risks, etc. Therefore, this study will next explore how to balance the interests of all parties under this unique international science and technology and geopolitical structure, and promote cross-strait science and technology cooperation and economic prosperity in a peaceful and stable manner.

1.3 How does the Kinmen AI Computing Center help break through the blockade and promote cross-strait cooperation?

In the current international situation where the United States has imposed a technological blockade on AI chips, exploring effective breakthroughs has become a major issue in cross-strait scientific and technological cooperation. This paper will focus on the concept of Kinmen AI Computing Center, explore how it becomes a key hub for cross-strait cooperation, and specifically clarify the following research questions:

Feasibility of Kinmen AI Computing Center In view of the background of the international technology blockade, we will explore the feasibility of establishing an AI computing power center in Kinmen and its strategic position in cross-strait scientific and technological cooperation. Analyze whether this idea is practical and feasible, taking into account existing policies and legal frameworks, as well as the necessary technical infrastructure and human resources.
Mechanism to combat technological blockade Study how the Kinmen AI Computing Center can serve as a multi-functional platform to provide necessary AI computing resources to the mainland while ensuring compliance with cross-strait laws and regulations. Explore in detail how we can work together to avoid the negative impacts of lockdowns and promote technological development.
Strategies to promote cross-Strait cooperation Analyze how the Kinmen AI Computing Center can strengthen cross-strait cooperation in the field of science and technology, and study the strategies and measures needed to promote long-term cooperative relations. This includes how the two sides of the Taiwan Strait can effectively coordinate in protecting intellectual property rights and technology transfer.
Economic and political impacts Evaluate the impact of the establishment and operation of the Kinmen AI Computing Center on cross-strait economic relations, as well as the changes it may bring to the regional and even global technological innovation landscape. Explore whether such collaboration would have political implications and how these potential impacts could be managed.
Potential risks and challenges Identify risks and challenges that may be encountered in the process of establishing and maintaining the Kinmen AI Computing Center, including leakage of technical secrets, network security protection, and possible political sensitivity issues.

2. Literature review

2.1Related research and cases on AI technology blockade

In today’s global economic landscape, AI technology and the semiconductor industry have become the core of technological innovation. The competition between the United States and China in the field of AI chips has become increasingly fierce, leading to a series of technology blockades and export control measures. Chang and Yeh (2018) explored in their study the talent needs of Taiwanese companies as they face the Industry 4.0 transformation process, particularly emphasizing the importance of professional skills in the fields of AI and semiconductors. Cho (2023) analyzed the US-China decoupling model in the semiconductor and AI technology supply chains, which has had a profound impact on global technological innovation. Danilin (2022) regards the U.S.-China technological war as the beginning of a new geopolitical era, the impact of which may reshape the international order. Fang’s (2002) case study highlights the competitive advantages of Taiwan’s semiconductor industry, especially in terms of innovation and market responsiveness.
The research by Malkin and He (2023) analyzed the geoeconomics of the global semiconductor value chain and how U.S.-China technology competition affects the expansion of related value chains.

2.2 History and Current Situation of Cross-Strait Scientific and Technological Cooperation

The development history and current trends of cross-Strait scientific and technological cooperation are gradually formed in the long-term economic and cultural exchanges and the complex international political environment. From early cooperation in the field of information technology to now covering a wider range of high-tech fields, cross-strait scientific and technological cooperation has experienced continuous deepening and expansion.

Historical review Through a case study of cross-Strait cooperation in the LED industry, Tsai (2012) revealed that early cross-Strait scientific and technological cooperation was concentrated in specific high-tech fields, and emphasized that under the ECFA framework, both sides of the Strait should strengthen industrial cooperation to jointly enhance competitiveness. In addition, Hung’s (2009) study evaluated how Taiwan’s information technology industry promotes innovation and improves performance through cooperation with the mainland from the perspective of competition and cooperation.
Structural changes Entering the 21st century, cross-strait scientific and technological cooperation has undergone structural changes. Chen (2011) pointed out that investment by Taiwanese high-tech companies in the mainland not only promotes cross-strait economic cooperation, but also contributes to the formation and development of industrial clusters. In addition, the research by Yang, Sun, and Huang (2018) explored the possibility of cross-Strait energy cooperation under the new situation, and proposed that the energy field, especially offshore wind power, is a new area for cross-Strait cooperation.
Current challenges and status quo Although cross-Strait scientific and technological cooperation has a rich historical foundation and huge development potential, it currently faces many challenges. Clough (2001) analyzed from a political perspective the continued development of cross-Strait scientific and technological cooperation despite the political deadlock, highlighting the uniqueness and relative independence of the field of scientific and technological cooperation. Generally speaking, cross-strait scientific and technological cooperation has gradually expanded from early cooperation in information technology and electronic manufacturing to emerging fields such as energy, biotechnology, and artificial intelligence. Although faced with the challenges of changes in the international political and economic environment and fluctuations in cross-Strait relations, the potential for cross-Strait scientific and technological cooperation is still huge, providing new opportunities for future cooperation.

Reference, research methods

3.1 Research Design

This chapter aims to introduce the overall structure of this study, including the purpose, scope and problem statement of the study. Through an in-depth analysis of the Kinmen AI Computing Center concept, this study will explore the challenges faced by the center in promoting technological innovation, raising necessary funds, complying with relevant laws and regulations, and responding to changes in the cross-strait political environment. At the same time, the research will identify and propose potential strategies and solutions to promote the center’s stable and effective development amid uncertain cross-Strait relations.

Research purpose This study aims to gain an in-depth understanding of the feasibility of the Kinmen AI Computing Center concept and evaluate its implementation challenges and opportunities in the context of current international technology trends and cross-strait relations. In addition, the research also aims to provide a systematic analysis framework to promote the center to become an accelerator for cross-strait technological innovation and industrial development.
Research scope This research will focus on the following core areas:
- Technological innovation: Analyze the role and potential of Kinmen AI Computing Center in promoting cross-strait technological innovation, especially in the field of AI.
- Fundraising: Explores the challenges for centers raising funds in the current economic and political environment, and strategies for facing these challenges.
- Legal compliance: Evaluate the possible impact of cross-strait and international laws on the operation of the computing center, and how to ensure the legal operation of the center in a changing legal environment. Cross-Strait Political Relations: Study the impact of fluctuations in cross-Strait political relations on the stable operation of the Center, and seek strategies that can adapt to these fluctuations.
Problem statement Issues this study will explore include:

What role can the Kinmen AI Computing Center play in promoting cross-strait technological innovation and industrial development?
- In the complex cross-strait political environment, how will the center overcome challenges such as financing?
- How does the center ensure legal and compliant operations under the dynamically changing regulatory framework?
- In response to the uncertainty in cross-strait relations, how should the center plan and implement corresponding response strategies?
- In summary, this chapter will lay the foundation for the overall research and provide a clear direction and methodological basis for in-depth discussion in subsequent chapters.

3.2 Data collection method

In order to meet the diverse needs of this study for a comprehensive analysis of the Kinmen AI Computing Power Center, we adopted the following data collection methods:

Literature review In order to gain a deeper understanding of the background, development status and macro-environment of Kinmen AI Computing Center, literature review plays a fundamental role in this study. This includes but is not limited to:
- Government reports and planning documents: Collect official documents from both sides of the Taiwan Strait on science and technology plans, economic development strategies and AI policies.
- Academic articles and journals: Read extensively academic articles related to AI technology, computing center operations and management, cross-strait economic cooperation, etc., and summarize the latest research results and theoretical progress.
- News reports and industry analysis: Collect news reports from the fields of technology, economy and politics, as well as analysis reports from professional institutions on the development of technologies and markets related to AI computing power centers.
Technology-assisted analysis In view of the processing and analysis needs of large amounts of data in modern research, the author introduced an artificial intelligence auxiliary tool, namely ChatGPT-4, into the research process. This tool is mainly used for pre-processing of data. ChatGPT-4 is used to summarize and organize literature materials, including key information extraction and preliminary classification, to improve the efficiency and completeness of data collection.

3.3 Data analysis method

In order to improve the efficiency and quality of research, in this study, we used the artificial intelligence tool ChatGPT-4 as an auxiliary tool for writing papers. The application scope of ChatGPT-4 covers many aspects from the development of initial ideas, the integration of literature materials, to the formation of research proposals.

Preliminary analysis ChatGPT-4 provides us with insightful reference opinions and analysis perspectives in the preliminary analysis stage. Through dialogue with them, we were able to examine the problem from different perspectives and reveal potential research directions and analytical frameworks during the discussion.
Language expression and draft writing During the paper writing stage, ChatGPT-4 was used to improve the quality of language expression and the initial construction of the draft. Its capabilities include copy generation, writing style adjustment, and text proofreading and editing.
Data validation It is worth mentioning that all analyzes and recommendations generated using ChatGPT-4 are manually verified by the author. Ensure that the ideas presented are accurate, the data are reliable, and comply with academic research standards.

3.4 Ethical considerations

In the process of this research, we made full use of the large language model ChatGPT-4 as an auxiliary tool for writing papers. During this process, we paid special attention to and strictly adhered to several key ethical considerations to ensure that the research was conducted not only efficiently but also in compliance with academic ethical standards.

Transparency In the process of this research, we made full use of ChatGPT-4, an advanced artificial intelligence tool, to assist in the data collection, preliminary analysis, and paper writing process. In order to ensure the transparency of the research process, we hereby clearly state that we were assisted by large language models (LLM) in the writing process of this paper, especially in processing the large data set, generating preliminary analysis suggestions, and drafting the text of the paper. While using large language models, the author fully recognizes the responsibility as an author and researcher for the content of the final submitted paper. We ensure that all research results and conclusions are based on adequate data analysis, critical thinking, and scientific argumentation processes, and strive to make all relevant information and methods of this research as transparent and clear as possible.
Originality and Attribution In the process of using large language models to assist in the writing process, we strictly ensure the originality of the research results. Any content generated by the large language model will be manually reviewed and reconstructed to ensure that the content of the final paper is unique and attributed to the study authors. At the same time, we also pay attention to avoid directly quoting the generated content under inappropriate circumstances to protect intellectual property rights.
Responsibility In writing research using ChatGPT-4, the author recognizes that responsibility for the final research results and any related decisions remains with the researcher. This means that researchers need to critically evaluate and make appropriate choices for any analysis and suggestions provided by large language models to ensure the accuracy and reliability of the research results. Although we cannot specifically label every piece of content generated with the assistance of large language models, we promise that all research results we provide will undergo rigorous manual review and integration to ensure that they meet the standards and requirements of academic research.
Adhere to academic standards Throughout the entire research process, from data collection to paper writing, we adhere to academic ethics and standards. This includes, but is not limited to, accurate citation of references, thorough documentation of the research process, and objective presentation of the research results.

3.5 Research Limitations

In conducting this study, we faced several unavoidable limitations that may have affected the completeness and scalability of the findings. The following are the main study limitations we identified:

Accessibility of data collection Although we tried our best to collect a wide range of relevant literature and information, due to resource limitations and the non-publicity of some information, we were unable to obtain all potential information. In particular, some of the latest research results, dynamic updates of cross-strait policies, or the lack of specific technical details may have a certain impact on our research results.
Limitations of technical assistance Although ChatGPT-4, as an advanced artificial intelligence technology, has provided tremendous support for our research, its limitations in understanding complex problems, capturing cultural and regional details, and the interpretation of knowledge in certain professional fields may not be accurate enough. These factors limit the extent to which we can only rely on such technical tools for analysis and information collection.
Generalizability of research results This research mainly focuses on the establishment of the Kinmen AI Computing Power Center and its impact on cross-strait scientific and technological cooperation. Therefore, the scope and background of the research are specific to the region and timeliness. This also means that our research results may be limited by factors such as the state of cross-strait relations, technological development stage, and policy environment in a specific period, and may have limited generalizability and applicability to other regions or different periods.

Although we tried our best to overcome these limitations during the research process to improve the accuracy and reliability of the study, the existence of these research limitations reminds us that we need to be cautious when interpreting and applying the research results. Future research can expand and deepen by obtaining more comprehensive information, using more advanced technical tools, and exploring a wider range of application scenarios to overcome the limitations of the current research.

4. Policy, economic and technical background analysis

4.1 Specific measures of the US blockade policy and its impact on the mainland

Measures of the US blockade policy
- Export restrictions: In recent years, as technology competition has intensified, the U.S. government has implemented a series of export restrictions on AI chips and related technologies, aiming to restrict the delivery of these technologies to the mainland. These restrictions include updates to export rules for specific products and technologies, Entity List restrictions on specific businesses, and restrictions on investment. These measures have had a significant impact on mainland China’s scientific and technological progress and industrial development. According to the CSIS report (2022), the United States has updated its export rules for AI chips, restricting companies in specific regions, including mainland China, from purchasing American-made AI chips (Center for Strategic and International Studies, 2022). The updates to these rules are intended to prevent advanced U.S. technologies from being used to enhance China’s military capabilities or be used in unfair competitive practices. At the same time, The Diplomat (2024) reported that a series of export control measures first implemented in October 2022 were intended to restrict mainland China’s access to advanced AI chips manufactured in the United States (Cho, 2024). The goal of these control measures is to weaken the mainland’s ability to develop in the field of AI. In addition, according to Reuters reports (2024), the new rules aim to prevent the export of more advanced AI chips designed by Nvidia and other companies to the mainland (Reuters, 2024). These export restrictions have had a clear impact on the research, development and application promotion of AI technology. Therefore, the U.S. export restrictions have had a profound impact on the mainland’s technology industry and the global AI chip market. This not only affects the ability of mainland companies to obtain key technologies, but also has a broad impact on global technological innovation and cooperation.
- Entity List: In order to protect national security and economic interests, the U.S. government has implemented the so-called “Entity List” against specific foreign entities, organizations and individuals. The list includes entities deemed to potentially threaten U.S. national security or engage in unfair competition using U.S. technology. Companies placed on the list will be restricted from purchasing U.S.-made technology and equipment unless they have special permission. According to official information from the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, the “Entity List” clearly points out the licensing requirements faced by each company or individual listed (Bureau of Industry and Security, n.d.). Recently, according to the Federal Register, the U.S. Export Control Review Committee (ERC) decided to add several mainland companies to the “Entity List”, including Dennex Enterprises Limited, Exeya Co., Limited, etc. (Federal Register, 2024a; Federal Register, 2023). These new entities cover different fields from high-tech electronic products to trade and investment, reflecting the United States’ strict attitude towards technology export controls.
- Investment restrictions: In recent years, the U.S. government has taken a series of measures to restrict direct investment by U.S. companies in mainland technology companies, especially in sensitive technology fields. These restrictions are intended to prevent U.S. technology and funding from being used to enhance China’s military capabilities and technological competitiveness. Executive order restricts investment: According to the Council on Foreign Relations (Council on Foreign Relations, 2023), President Biden issued an executive order restricting U.S. direct investment in China in sensitive technology fields. This is intended to prevent these technologies from helping Beijing improve its military capabilities. New Procedure to Restrict Investment in China: Pursuant to the White House Case (White & Case, 2023), the Biden order establishes a new procedure to limit U.S. outward investment in specific technological fields in China. This includes investment restrictions in areas such as artificial intelligence and advanced semiconductors. Ban on certain high-tech investments: An executive order specifically targets three high-tech areas: artificial intelligence, advanced semiconductors, and quantum computing, banning new U.S. investments in China in these areas. (China Briefing, 2023)
Impact on Mainland China
- Challenges of technological development: In recent years, U.S. export controls and investment restrictions on mainland China have had a significant impact on mainland technology companies, especially in terms of acquiring key technologies and attracting international investment. Increased investment in R&D: According to the CSIS report, Western export control measures have caused a rebound among mainland companies that were included on the list, forcing them to increase investment in R&D (Center for Strategic & International Studies, n.d.). Although this can be seen as a positive push for independent innovation, it may face development bottlenecks in the short term due to the lack of mature technology. Impact of international trade relations: According to the Access Partnership report, US-China trade tensions have had a complex impact on the global supply chain and regulatory environment, making companies related to global supply chains face a more complex regulatory environment (Access Partnership, 2024). Security concerns and technological leadership: According to analysis by East Asia Forum, the United States’ export controls and investment restrictions on the mainland are designed to maintain technological leadership and address security concerns in key areas (East Asia Forum, 2024). This directly limits mainland technology companies’ access to key and advanced technologies and increases the difficulty of technological innovation. Concerns about the long-term impact on global trade: At the same time, U.S. companies are also concerned about overly broad restrictions on exports to China, fearing that it may have an impact on China’s long-term technological development and have negative consequences on global trade (Pillsbury Winthrop Shaw Pittman, n.d.).
- Market and supply chain adjustments: Facing the U.S. technological blockade and trade restrictions, mainland China has taken comprehensive measures to adjust its market strategy and restructure its supply chain. These strategies aim to reduce dependence on foreign technology while accelerating the development of domestic technological innovation and independent production capabilities.
- Promote domestic innovation: According to a report by the Center for International Strategic Studies (CSIS), mainland China is promoting a domestic innovation strategy and gradually reducing its reliance on imported technologies such as high-end chips (Kennedy & Johnson, 2023). This includes focused investment in research and development in key areas such as semiconductors and artificial intelligence. Expanding mainland’s internal production capabilities: In response to U.S. export controls, mainland China is accelerating the expansion of its internal semiconductor industry’s production capabilities. As research by Rhodium Group shows, China has significantly improved its traditional chip production capabilities in the past few years (Rosen, 2024). Diversify import sources: Faced with import restrictions on specific technologies and products, mainland China seeks to diversify import sources and reduce reliance on a single external market. This includes strengthening cooperation and trade in science and technology with countries in Europe, East Asia and other regions.
- Promotion of independent innovation: In recent years, in the face of U.S. blockade measures, mainland China has accelerated its pace of independent technological innovation, especially in key technology fields such as semiconductors and artificial intelligence (AI).
  - Semiconductor self-sufficiency strategy: According to a report by the Center for International Strategic Studies (CSIS), in the mid-2010s, mainland China had actively promoted a semiconductor self-sufficiency strategy. The key to this strategy is that in the face of external blockades and restrictions, mainland China increases investment and support in the domestic semiconductor industry to improve domestic production capacity and technological levels (Kennedy & Johnson, 2023).
  - Response to the U.S. technology blockade: The South China Morning Post (SCMP) reported that China’s response to the U.S. blockade strategy is to strengthen its capabilities in innovation and independent research and development, rather than choosing to isolate itself. A spokesman for the National People’s Congress stated that China will overcome U.S. technology and scientific sanctions through innovation and self-reliance (SCMP, 2024).
  - Development model in the AI field: According to a policy brief from the German Mercator Institute for China Research (MERICS), mainland China has adopted a nationwide large-scale computing infrastructure project and a comprehensive development strategy for AI development. This shows mainland China’s commitment to achieving technological independence in the field of AI (MERICS, n.d.).

Technology policy and development: According to a report by the National Bureau of Asian Research (NBR), in response to the challenge of U.S. restrictions, China has strengthened domestic efforts by encouraging innovation in the field of AI, increasing research and development funding (NBR, n.d.).

Through the analysis of the specific measures and impacts of the United States’ AI technology blockade policy in mainland China, this section provides an in-depth understanding of an important factor in the current global technology competition environment. These policies not only pose a direct challenge to mainland China’s technological development, but also prompt it to seek new market strategies and strengthen independent innovation capabilities, which will have a profound impact on the future development of cross-strait technological cooperation.

4.2 Taiwan’s technological and economic situation

Taiwan occupies an important position in the global semiconductor industry, especially in the field of AI chips. With the rapid development of global AI technology, Taiwanese companies have shown strong competitiveness in design, manufacturing and supply chain management.

Taiwan’s technological development Taiwan has made significant achievements in AI chip technology innovation, R&D investment, and talent cultivation. These efforts have supported its leadership in the global high-tech industry.
- AI chip technology innovation: As global technology competition intensifies, Taiwan’s innovation in chip technology is increasingly critical. The government has cooperated with industry to promote a series of innovation programs, such as the Taiwan Chip-based Industrial Innovation Program (Taiwan CbI), which focuses on upgrading academic research and teaching infrastructure and attracting global R&D talents (Taiwan Chip-based Industrial Innovation Program).
- R&D investment: Taiwan continues to increase R&D investment in the fields of AI and semiconductors. The success of Taiwan’s integrated circuit design industry is due to the government’s strong investment and support in technology research and development (EDN Asia, n.d.). In addition, while pursuing Moore’s Law, Taiwan has invested resources in cultivating talents to bring a new nano era to the semiconductor industry (Taiwan Semiconductor Manufacturing Company Limited, n.d.).
- Talent cultivation: In order to maintain its competitiveness in the global semiconductor industry, Taiwan has strengthened talent cultivation by upgrading its education and training system. This includes the establishment of high-level educational institutions and R&D facilities, as well as active interaction and cooperation with the international science and technology community (Runtime, n.d.).
Taiwan’s economic environment supports AI hardware and industrial chain Taiwan’s economic environment provides solid support for its AI hardware and the entire semiconductor industry chain. Taiwan plays a key role in the global AI supply chain, especially in the chip revolution, which has far-reaching influence.
- Key players in the global AI supply chain:
  - Taiwan’s leading position in AI chip technology innovation and production is due to its strong economic foundation and deepened investment in technology research and development, making it an indispensable link in the global semiconductor supply chain.
  - Under a highly specialized economic system, Taiwan not only has unique achievements in innovation, but also plays an important role in the global supply chain. According to CNBC, in a statement by the CEO of the Taiwan Stock Exchange, Taiwan has been proven to play a key role in the AI chip revolution and the process of the global semiconductor industry (CNBC, 2024).

In addition, Taiwan continues to increase R&D investment in promoting local and global AI chip technology innovation, and focuses on cultivating professionals in the technology industry. These efforts have strengthened Taiwan’s competitiveness in the international market and made significant contributions to global technological development.

- Margin of global chip manufacturing capacity:

Companies in Taiwan and South Korea have consolidated their dominant position in global chip manufacturing, especially in the production of AI chips. This advantage is not only technologically superior, but also has a profound impact on Taiwan’s economy.

Oxford Economics pointed out that since companies in Taiwan and South Korea control most of the world’s chip manufacturing capabilities, this has given Taiwan a competitive advantage in manufacturing AI chips and has a significant positive impact on its macroeconomics (Oxford Economics, n.d.). This impact is not only reflected in the promotion of internal industries, but also in its external contribution to the global supply chain and international market.

Taiwan’s economic development strategy, especially its manufacturing capabilities in the field of AI chips, highlights its central role in the global technology industry. In the current context of rapid changes in global technological development, Taiwan’s status has brought stable growth momentum and international business competitiveness to its economy.

- Industrial synergies:

Taiwan has demonstrated significant industrial synergy in all aspects of the AI chip industry chain. From front-end chip design to back-end foundry, packaging and testing, it has formed an efficient and integrated production network. This “one-stop” industry chain is unique to Taiwan and cannot be found in other countries such as the United States or Japan. The exact same model.

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest chip foundry, providing products for more than 70% of the world’s chip manufacturing needs, especially in the field of AI (Stimson Center, 2022). This industrial environment has made Taiwan an important hub for global AI hardware R&D and manufacturing. The industrial environment in Taiwan not only promotes close cooperation between industries, but also strengthens the integration of upstream and downstream supply chains. This synergy gives Taiwan an irreplaceable position in the global semiconductor market and ensures the smooth operation and technological progress of every link in the industrial chain.

The strengthening of Taiwan’s industrial chain and industrial synergy, especially in the field of AI chips, have become an important support point for its economic development. Taiwan’s industrial environment not only contributes significantly to the island’s economy, but also has a profound impact on the supply and innovation of the global AI hardware and semiconductor industries.

Wu, Kinmen AI computing power center concept

5.1 Concept and design principles of Kinmen AI Computing Center

With the promotion of the global digital economy, artificial intelligence (AI) technology has become a key force in promoting future technological development. In order to take the lead in this field, the idea of Kinmen AI Computing Center came into being, aiming to create a high-performance computing platform that integrates AI research, data processing and algorithm innovation.

Conceptual background The concept of the Kinmen AI Computing Power Center is based on the following core goals: to promote the research and development of AI technology, strengthen data processing capabilities, promote algorithm innovation, and lay a solid foundation for the commercialization and practical application of AI technology. The center is envisioned as a bridge connecting the scientific and technological circles on both sides of the Taiwan Strait, serving not only Taiwan, but also scientific research institutions and enterprises in the mainland and even around the world.
Design principles Innovation-driven: Kinmen AI Computing Center will adhere to the design principle of innovation as the core and promote the cutting-edge development of the AI field through continuous technology research and development and algorithm optimization. Sustainable development: During the construction and operation process, the center will attach great importance to environmental protection and energy efficiency, using green energy and efficient cooling systems to ensure a win-win situation between technological progress and environmental protection. Open cooperation: The center will establish an open cooperation mechanism to encourage cross-strait and international scientific research institutions, universities and enterprises to participate and share resources and results. Talent training: The center will cooperate with universities and colleges to set up graduate training and exchange programs to cultivate high-end talents in the AI field. Data security and privacy protection: While strengthening data processing capabilities, the center will strictly abide by laws and regulations on data security and privacy protection to ensure the legality and ethics of all research activities.
Anticipated impact The establishment of the Kinmen AI Computing Center is expected to have a profound impact on the development of AI technology on both sides of the Taiwan Strait and even around the world. It will not only accelerate the output of AI research results and promote technological innovation, but will also attract more scientific researchers and enterprises to devote themselves to the exploration and application of AI technology, further promoting economic development and social progress.

5.2 The impact of Kinmen’s geographical and political location on this concept

Kinmen, located at the forefront of the Taiwan Strait, has a unique geographical and political status. This location not only has a profound impact on its own development, but also has important strategic significance for the proposed Kinmen AI Computing Power Center.

The strategic value of geographical location Kinmen’s geographical location makes it an important bridge connecting mainland China and Taiwan. This geographical advantage provides the only strategic value for the AI computing power center. The center can make full use of this geographical advantage to become an important platform for cross-strait scientific and technological exchanges and cooperation, promoting the sharing of scientific and technological resources and the rapid transfer of scientific research results.
Challenges and opportunities in the political environment Kinmen’s special political status, located between mainland China and Taiwan, makes it play a subtle role in cross-strait relations. On the one hand, this location provides potential opportunities for cross-strait scientific and technological cooperation; on the other hand, it may also face challenges due to changes in the political atmosphere on both sides of the strait. The establishment of an AI computing power center requires careful assessment of this political environment and planning of flexible response strategies to ensure the smooth operation and long-term development of the center.
Possibility of strengthening cross-strait cooperation The establishment of the Kinmen AI Computing Center has special geographical and political significance and has the potential to become an important link in strengthening cross-strait scientific and technological cooperation. The successful establishment and operation of the center will promote broader consensus and cooperation between the two sides in talent exchange, data sharing and the formulation of technical standards, and inject positive scientific and technological elements into the stable development of cross-strait relations.

The realization of the concept of Kinmen AI Computing Power Center will be deeply affected by its geographical and political location. This location provides the center with unique strategic value and presents both opportunities and challenges. Prudent assessment and utilization of Kinmen’s geographical advantages and flexible response to changes in the political environment will be the key to realizing the central vision and promoting cross-strait scientific and technological cooperation.

5.3 The potential for cross-strait collaboration in talent, data and hardware

As global technology competition intensifies, the United States’ sanctions on mainland technology companies have highlighted the necessity of cross-strait technology cooperation. Mainland China has huge data resources and talent pool in the field of artificial intelligence (AI), but it is limited in access to computing power. Relatively speaking, Taiwan has advantages in the entire hardware manufacturing industry chain and is able to obtain high-end AI chips from companies such as Nvidia. This chapter will explore the potential for complementary cooperation between the two sides in AI hardware, data and technology development in this context, and how this cooperation can promote regional scientific and technological progress and economic development.

Talent and data advantages in mainland China

The mainland has invested heavily in talent training and data accumulation. The huge user base in the market provides valuable resources for the training of AI algorithms. Many universities and research institutions have trained a large number of technical talents in the AI field.

Taiwan’s entire industry chain of hardware manufacturing

Taiwan has a complete semiconductor industry chain from design and manufacturing to packaging and testing, and has not been affected by US sanctions. This means that Taiwan can obtain high-end AI chips from international companies such as Nvidia and retain the ability to manufacture advanced computing hardware. Taiwan’s independence and technological strength in the field of semiconductor manufacturing provide a substantial hardware foundation for cross-strait cooperation.

The synergistic potential of cross-strait cooperation

In the current context, cross-Strait collaborative cooperation is not only feasible but also obviously complementary. Taiwan can use its advantages in hardware manufacturing to provide the mainland with necessary AI computing capabilities. At the same time, the mainland’s data and talent resources can also promote Taiwan’s deepening of AI software and algorithm development. By establishing a cooperation mechanism and sharing technology and resources, both sides of the Taiwan Strait can jointly overcome existing technical limitations and promote the development and application of regional and even global AI technology.

Collaborative cooperation between the two sides in the field of AI has huge potential. By leveraging their respective superior resources and technological capabilities, the two sides can not only effectively respond to the challenges of international technological competition and political factors, but also jointly promote regional technological innovation and economic prosperity, setting a model for complementary cooperation. In the future, this cooperation model is expected to become an important way for regional and even global scientific and technological cooperation.

Challenges

In the process of implementing the Kinmen AI Computing Center, you may encounter the following challenges:

6.1 Data security and privacy protection

As data becomes the core asset of the modern economy, especially in the field of artificial intelligence, large-scale data collection and analysis have become indispensable. Against this background, the Kinmen AI Computing Center faces major challenges in ensuring data security and maintaining user privacy.

Complexity of Data Security

Data security is one of the top priorities in the operation of the AI computing center. With the expansion of data volume, especially the processing of sensitive data, centers must comply with strict data protection standards and implement advanced security technologies and protocols, such as encrypted transmission, access control and network isolation, to prevent data leakage, abuse or loss.

Necessity of privacy protection

The protection of user privacy is equally important. This is not only a technical issue, but also a legal and ethical issue. The AI computing power center needs to establish a transparent privacy protection policy to let users understand how their data is collected, used and shared. At the same time, the center also needs to comply with relevant privacy protection laws and regulations, such as the Personal Data Protection Act, and implement privacy impact assessment and privacy design principles.

Legal Compliance Framework

As emerging technologies develop, the relevant legal and regulatory frameworks continue to evolve. From the beginning of its construction, the Kinmen AI Computing Center must consider complying with international and cross-strait laws and regulations, including cross-border data transmission laws, and cooperate with legal professionals to ensure the legality and compliance of all operational activities.

Technological Innovation and Risk Management

In order to cope with these challenges, the Kinmen AI Computing Center needs to continuously carry out technological innovation and implement comprehensive risk management strategies. This includes using artificial intelligence to enhance security monitoring, developing new cybersecurity technologies, and establishing rapid response mechanisms to handle security incidents.

6.2 Raising capital investment

In the process of implementing the concept of Kinmen AI Computing Power Center, raising sufficient investment funds and ensuring the effective use of funds constitute an important and challenging task. To build an AI computing center that meets high standards, it not only requires huge initial investment to establish infrastructure, purchase advanced hardware equipment and develop software, but also requires continuous financial support for daily operations, technology upgrades and talent training.

Methods of raising funds

Government Funding and Subsidies: As an important project to promote technological development and regional economic growth, the Kinmen AI Computing Center can seek funding and subsidies from the governments on both sides of the Taiwan Strait. This includes direct government investment, technology development funds and financial support for specific technology projects.
Private Investment and Cooperation: In addition to government funds, the participation of private capital is also extremely important for raising funds. We can cooperate with private institutions such as technology companies, venture capital and private equity funds to attract their investment in AI computing center projects.
International Cooperation and Funding: In view of the international cooperation potential of the Kinmen AI Computing Power Center, cooperation with international technology companies, research institutions and transnational investment funds should be explored to obtain international financial support.

Effective use of investment

Clear investment priorities: When resources are limited, clear investment priorities are key to ensuring the effective use of funds. This includes prioritizing investment in infrastructure construction, research and development of key technologies and talent training.
Establish a strict financial management system: In order to ensure the effective use of funds, the Kinmen AI Computing Power Center needs to establish a strict financial management and supervision mechanism, including regular financial audits, strict control of project progress and budget, etc.
Promote industrial collaboration and ecological construction: Through the effective use of funds, we should not only promote the construction and development of the AI computing power center itself, but also promote the collaboration of surrounding industries and the construction of a technological ecosystem to achieve the multiplication effect of funds. Raising sufficient investment funds and ensuring their effective utilization are crucial to the implementation process of the Kinmen AI Computing Power Center. By raising funds through multiple channels and establishing a rigorous management and supervision mechanism, the Kinmen AI Computing Power Center is expected to achieve its ambitious construction goals and contribute to the development of AI on both sides of the Taiwan Strait and even around the world.

6.3 Uncertainty in cross-Strait relations

Facing the background of intensified global technological competition, the Kinmen AI Computing Center, as an important technological project located at the political and economic intersection of the two sides of the Taiwan Strait, will inevitably be directly affected by the fluctuations in cross-strait relations during its advancement. Therefore, how to ensure the stability and sustainable development of the center in a complex and unpredictable political environment has become an important key to determining the success or failure of the project.

The uncertainty in cross-Strait relations mainly comes from differences in political stances, changes in the international economic and trade environment, and the impact of the geopolitical landscape. Due to these uncertainties, Kinmen AI Computing Center faces a series of challenges such as investment risks, changes in partners, and technology transfer obstacles.

Strategy for Stable Development

Diversified investment sources: In order to reduce the risk of a single investment source, the center needs to seek diversified sources of funding and technical support, including international partners, the private sector and non-governmental organizations.
Strengthen the foundation of legitimacy: Solid planning in legal and compliance aspects, including business operations that comply with cross-strait and international laws, can maintain the center’s legitimacy and legal operations when political risks intensify.
Establish a flexible operating mechanism: Center operations need to be highly flexible and adaptable to quickly respond to changes in the political environment, including temporary adjustments to cooperation strategies or business focus.
Promote cross-Strait science and technology communication: Through active science and technology diplomacy and communication, strengthening mutual trust and understanding between the cross-Strait science and technology circles will help maintain the stability of cooperation amidst political fluctuations.
Risk Management and Emergency Preparedness: Develop comprehensive risk management plans and contingency plans to ensure assets, personnel and intellectual property are protected and normal operations can be quickly restored in the face of political crises.

During the implementation of the Kinmen AI Computing Center, the uncertainty of cross-strait relations undoubtedly brought severe challenges. However, through effective strategic planning and risk management, the center can maintain stable development amid fluctuations in cross-Strait political relations, and then play its important role in cross-Strait and even global technological and economic cooperation.

6.4 Compliance with laws and regulations

With the rapid development of AI technology and data use, relevant laws and regulations are constantly being updated and changed to adapt to new technological developments and social needs. For a large-scale project like the Kinmen AI Computing Center that covers multiple fields of application, how to ensure legal and compliant operations under different legal environments has become an ongoing and complex challenge.

Uncertainty of the legal environment

Regional Differences in Laws and Regulations: Due to differences in cross-strait and international laws and regulations in data protection, privacy, intellectual property, etc., the AI computing power center needs to accurately grasp and comply with the regulatory requirements of different legal jurisdictions, which places high demands on its legal strategy and business operations.
Technological innovation and regulatory lag: The speed of technological innovation often exceeds the update speed of laws and regulations, resulting in unclear legal guidance in areas such as emerging technology applications and cross-border data flows, increasing operational risks.

Legal and Compliance Operation Strategy

Establish a professional legal team: Arrange a professional legal advisory team to continuously monitor and analyze cross-strait and international laws to guide the center’s legal strategies and business decisions.
Strengthen compliance training and awareness: Regularly conduct training on laws, regulations and compliance operations for the center’s management and employees to enhance the legal awareness and compliance level of all employees.
Actively participate in the discussion of laws and regulations and the formulation of standards: By participating in the discussions of relevant laws and regulations and the formulation of international standards, we can not only keep abreast of regulatory trends, but also strive for more favorable operating conditions for the center.
Establish risk management and response mechanism: Develop a comprehensive risk management and response mechanism including legal risk assessment, preventive measures and contingency plans to deal with the possible impact of changes in laws and regulations.

Facing the uncertainty and challenges of the legal environment, Kinmen AI Computing Center must adopt a proactive attitude, establish a professional legal team, strengthen compliance training, participate in regulatory discussions and establish risk response mechanisms to ensure legal and compliant operations in a rapidly changing legal environment. Through the implementation of these strategies, the Kinmen AI Computing Center will be able to steadily promote technological innovation and business development while ensuring legal compliance.

7. Conclusion and suggestions

This study conducted an in-depth discussion from multiple dimensions including the proposal of the Kinmen AI Computing Power Center concept, design principles, and challenges that may be encountered during the implementation process. Research has found that the Kinmen AI Computing Power Center, as an innovative scientific and technological development project, not only plays an important role in promoting regional scientific and technological progress and improving economic development, but also plays a bridge role in cross-strait scientific and technological cooperation and exchanges, providing new ideas and platforms for the stable development of cross-strait relations.

The complementarity of cross-strait cooperation in talent, data and technology provides a solid foundation for the successful implementation of the Kinmen AI Computing Center. By deepening cross-strait cooperation in the field of AI, it will not only promote technological innovation and knowledge sharing, but also help build closer economic ties and cultural exchanges, thereby enhancing mutual trust and promoting peaceful development.

7.1 Specific recommendations and future research directions

Based on the findings of this study, the following suggestions are made for the future development of Kinmen AI Computing Center and cross-strait cooperation:

Strengthen policy support and investment

It is recommended that governments on both sides of the Taiwan Strait provide more policy support and financial investment, lower the threshold and risks of project implementation, and create a more friendly investment environment.

Establish an ongoing talent exchange program

Both sides of the Taiwan Strait should jointly formulate and implement talent training and exchange plans to provide sufficient scientific research and technical talents for AI computing power centers.

On the premise of ensuring data security and personal privacy, promote the sharing of cross-strait data resources, and participate in the formulation of relevant technical standards to improve technical interoperability and compatibility.

Strengthen the docking and cooperation of laws and regulations

Both sides of the Taiwan Strait should strengthen docking and cooperation in science and technology laws and regulations to provide strong guarantee for the legal operation of AI computing power centers.

Future Research Directions

It is recommended that future research can further explore the potential for cooperation between the two sides in specific AI application fields (such as smart medical care, environmental monitoring, etc.), and propose specific solutions to overcome challenges in technology transfer and intellectual property protection.

7.2 Conclusion

The concept of the Kinmen AI Computing Power Center is not only of great significance to strengthening cross-Strait scientific and technological cooperation and promoting regional economic development, but also plays an indispensable role in promoting the peaceful and stable development of cross-Strait relations. By implementing the above recommendations and continuing to explore new cooperation models and opportunities, both sides of the Taiwan Straits can jointly meet the challenges brought about by technological innovation and work together to create a more prosperous future.

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Compliance With Laws and Regulations | Dylan Chiang