TAIWAN Trends and Developments Contributed by: Ken-Ying Tseng, Winona Chen and Roger Kai, Lee and Li Attorneys-at-Law
Lee and Li Attorneys-at-Law 8F, No 555 Sec 4 Zhongxiao E Rd Taipei 11072 Taiwan
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Supply Chain Cybersecurity Risk in Taiwan: Legal Obligations and Contracting Strategies for 2025 Introduction Taiwan, home to Taiwan Semiconductor Manufactur - ing Company (TSMC) and other major tech manufac - turers, occupies a uniquely strategic position in the global technology landscape. It serves as a hub for advanced semiconductor manufacturing and plays an integral role in the burgeoning AI-driven economy. In 2023, the Hague Centre for Strategic Studies pub - lished an article highlighting Taiwan’s pivotal posi - tion in the technology supply chain. The article notes that Taiwan produces over 60% of advanced chips (under 7 nm) and underscores the country’s critical role in powering the next generation of technolo - gies, including 5G telecommunications, advanced military systems and AI. Beyond chip production, Taiwan’s robust industrial clusters provide a compre - hensive ecosystem that supports essential upstream and downstream activities in the global technology manufacturing environment. This ecosystem covers a wide array of services, including AI server manu - facturing, semiconductor packaging and testing, power management solutions and advanced cooling technologies. Furthermore, Taiwan’s supply chain is not confined to domestic enterprises. Leading glob - al technology corporations, such as AWS, Google, Microsoft and Meta, have established or announced plans to establish AI data centres in Taiwan, reflect - ing a growing recognition of Taiwan’s strategic value as a technologically advanced location for support - ing the growing demand for AI-driven services and infrastructure.
However, despite its reputation as the “silicon shield”, Taiwan is not immune to cyber threats. In fact, recent intelligence and cybersecurity assessments demon - strate that the threat landscape in Taiwan is escalat - ing and becoming more complex. Taiwan’s National Security Bureau’s recent annual report emphasises the intensifying cyber threat environment faced by critical infrastructure sectors. In 2025, Taiwan’s criti - cal infrastructure reportedly endured an average of 2.63 million cyber-intrusion attempts daily, marking a 6% increase from the previous year. For decades, companies have invested and imple - mented robust internal defences, such as sophis - ticated firewalls, intrusion detection systems and endpoint protection, to safeguard their digital assets. However, threat actors have adapted their tactics, shifting from direct attacks on these fortified systems to exploiting less monitored and more vulnerable entry points. One of the most significant vulnerabilities lies within the supply chain, which is a complex network of third-party vendors, contractors, open-source soft - ware components and service providers that modern enterprises increasingly depend on. These external partners often have varying levels of cybersecurity investment and capability, creating potential weak links in the overall security posture. To address this vulnerability, both global regulatory bodies and Taiwanese authorities have enacted tar - geted measures to strengthen cybersecurity defenc - es across the supply chain. This article provides an overview of Taiwan’s evolving cybersecurity regula - tory landscape and critically examines areas where
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