Regulatory Landscape
Taiwan’s AI governance development is uniquely shaped by its position at the center of the global semiconductor supply chain. As the home of TSMC and other critical chip manufacturers, Taiwan’s regulatory decisions regarding AI carry implications far beyond its borders, particularly given that advanced AI chips are manufactured almost exclusively on the island.
The government is pursuing a measured approach to AI regulation, developing guidelines and draft legislation while avoiding measures that might disrupt its technology sector’s global competitiveness. The draft AI Basic Act represents the first comprehensive legislative proposal, though its timeline for passage remains uncertain.
Current Framework
Taiwan’s existing legal framework provides partial coverage for AI-related issues. The Personal Data Protection Act governs AI systems processing personal data, with recent amendments strengthening cross-border transfer restrictions and consent requirements. Consumer protection laws apply to AI-enabled products and services. Sector-specific regulations in finance, healthcare, and telecommunications address AI applications within their domains.
The Executive Yuan’s AI Development Guidelines establish voluntary principles for responsible AI development, covering transparency, fairness, accountability, and safety. Government agencies are implementing these guidelines in their own AI deployments, creating practical experience that informs the broader legislative discussion.
Semiconductor and Export Controls
Taiwan’s centrality to AI hardware supply chains creates unique governance dynamics. US export controls restricting advanced chip sales to China directly involve Taiwanese manufacturers, particularly TSMC. Taiwan’s compliance with and implementation of these controls represents a form of AI governance — controlling access to the computational substrate on which AI systems depend.
The government balances its alliance with the US on export controls against its economic relationships with Chinese customers. This geopolitical dimension adds complexity to Taiwan’s AI governance considerations that few other jurisdictions face.
Industry Impact
Taiwan’s technology industry, dominated by semiconductor manufacturing and electronics, increasingly engages with AI both as a tool (in chip design, manufacturing optimization) and as a product category (AI accelerators, edge AI chips). Companies like TSMC, MediaTek, and Foxconn are developing AI governance practices in anticipation of both domestic and international regulatory requirements.
What Comes Next
The draft AI Basic Act will continue through legislative review, with passage possible in 2025-2026. Taiwan’s approach is likely to emphasize innovation-friendly governance with targeted requirements for high-risk applications, similar to Japan’s model. International cooperation on AI governance — particularly with the US, Japan, and the EU — will shape Taiwan’s regulatory development, with semiconductor export controls remaining the most consequential near-term AI governance mechanism.