TAIPEI (Taiwan News) — Corporate strategy firm The Asia Group (TAG) praised Taiwan’s “pro-innovation” attitude and low policy risk in its recent AI governance report published Wednesday (Sept. 18).

“As the world’s largest contributor to advanced semiconductor manufacturing and production, Taiwan is well-positioned to effectively develop and integrate AI at home,” TAG said. However, due to sovereignty issues and exclusion from international organizations, Taiwan may face limitations in creating international AI rules, it cautioned.

TAG Managing Director and Co-Chair of Digital Practice George Chen (陳澍) said once Taiwan’s “AI Basic Law” is established, the next step should be to think about how to export Taiwan’s AI governance experience internationally, per CNA. Taiwan could consider leveraging the US and its allies like Japan to gain international influence in AI discourse.

“It would be a pity if, in such a significant AI era, Taiwan is still only playing the role of a manufacturer,” Chen said.

Chen said he believes that Taiwan has an absolute lead in the AI hardware sector but is lagging in software. He added that the government needs to help Taiwan’s AI software development keep pace with its hardware during the legislative process.

Taiwan announced a draft AI Basic Law on July 15, which, if passed by the Legislative Yuan, would become the world’s second national-level AI law.