On Tuesday 6 September, the Biden administration in the US outlined new guidelines to its much-anticipated $50bn CHIPS and Science Act funding, aimed at building up the domestic semiconductor industry.
“Companies who receive CHIPS funds can’t build leading-edge or advanced technology facilities in China for a period of ten years,” explained US Commerce Secretary Gina Raimondo.
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For the state of Indiana, this was yet another reason to strengthen its foreign direct investment (FDI) ties with Taiwan. Indianapolis and Taipei have been twin cities since 1978 with the US state being home to ten Taiwanese businesses.
At the end of August 2022, Indiana’s Governor, Eric Holcomb, and Secretary of Commerce Brad Chambers met Taiwan President Tsai Ing-wen and South Korea President Yoon Suk-yeol to celebrate recent investments in Indiana from Taiwan-based MediaTek and South Korea-based Samsung SDI.
Earlier in June, Indiana and Taiwan signed a memorandum of understanding for energy, biotech and semiconductor chip manufacturing that will see MediaTek establish a new design centre in the US state alongside Purdue University.
Indiana is also home to 12 South Korea-headquartered businesses. In May 2022, automotive manufacturing corporation Stellantis and South Korea-based Samsung SDI selected Indiana to build a $2.5bn electric-vehicle battery plant, which is expected to break ground in 2025 and create 1,500 jobs.
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By GlobalDataChambers talked to Investment Monitor about the importance of Taiwan and South Korea’s semiconductor industry for Indiana.
How would you describe Taiwan’s importance as an FDI market for Indiana?
Taiwan’s leadership in the semiconductor and technology space is critical for Indiana and the US as a whole. As stated in the Indiana-Taiwan memorandum of understanding, Indiana is committed to collaborating with industry and academia to reduce supply chain vulnerabilities and minimise disruptions to ensure critical goods remain accessible. We are working on all aspects – materials, chemicals, engineering and diagnostics – bringing the brightest minds from Taiwan and Indiana together to solve these shared challenges.
We believe Indiana is an ideal place for Taiwanese companies to grow, and Indiana’s engagement with Taiwan isn’t new. In 1979, Indiana became the first US state to forge a sister-state relationship with Taiwan. Indianapolis has also been a sister city to Taipei since 1978. In addition to investment and economic considerations, our relationship is focused on talent and academic growth. For example, Indiana universities host approximately 570 Taiwanese students each year.
Indiana and Taiwan have a significant economic partnership. In 2021, Indiana exported $240m worth of goods to Taiwan, while importing nearly $1.4bn worth of goods from Taiwan. While Indiana’s relationship with Taiwan is broader than FDI, we are proud that ten Taiwan-based companies, including recently announced MediaTek, have locations in Indiana, with manufacturing operations in transportation equipment, polymers and electronics, including semiconductors.
What other opportunities does Taiwan offer as a market to Indiana?
Agbioscience is a major focus for Indiana, and we are proud of our long agricultural trade relationship with Taiwan. We have hosted Taiwanese delegations in Indiana, and they have hosted us in Taiwan, as recently as our head of the Indiana State Department of Agriculture in 2019. Our memorandum of understanding facilitates collaboration and information sharing in the field of agriculture and agricultural technology and innovation, including cross-disciplinary discussions relevant to food, agriculture, science and technology businesses.
As well as attracting FDI from Taiwan into the country, does the state of Indiana plan to invest in Taiwan?
Indiana is deeply committed to further strengthening our relationship with Taiwan, and we are actively exploring ways to do that. Currently, ten Taiwan-based businesses have operations in Indiana, with a focus on life sciences, energy and battery manufacturing.
The memoranda of understanding signed between Purdue University, National Cheng Kung University and National Yang Ming Chiao Tung University [both of which are located in Taiwan], as well as that signed with [Taiwanese electronics manufacturer] Wistron, show Indiana’s deep commitment to mutual investments made with Taiwan. As outlined in the memoranda of understanding, Purdue and the two Taiwanese universities are planning an exchange of students, faculty and researchers, which will serve to expose Hoosiers [Indiana residents] to the amazing innovation that is occurring throughout the country. That exposure will naturally lead to new investments in Indiana.
What else is the state of Indiana focusing on when it comes to attracting FDI or investing abroad?
We are taking a narrow, focused approach when determining our trips abroad. It is important that we plan our strategy in a way that aligns the mutual strengths of our distinct economies. Indiana has exciting and bold strategies around innovation, and we are intentionally working with value-aligned partners who are interested in transformational changes to build an economy of the future with us. We plan to attend COP27 later this year and have already begun preparations for our 2024 Indiana Global Economic Summit on the heels of a successful 2022 summit in Indianapolis.
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