As artificial intelligence (AI) reshapes global industry, Foxconn Chairman Young Liu believes Taiwan stands at a pivotal crossroads—uniquely positioned to lead, yet vulnerable to shifting geopolitical and trade headwinds. Speaking at the Chinese National Federation of Industries (CNFI) on April 17, Liu offered a candid assessment of both the challenges and opportunities ahead in the AI era.
In a keynote titled 'Foxconn's GenAI Implementation Report' (transliteration), Liu highlighted the rapidly expanding AI market, referencing major US investments such as the Stargate Project and the surge in AI-related spending by cloud giants. These developments, he said, are not just trends—they're tangible opportunities for Taiwan.
Liu noted that roughly 80 to 90 percent of Taiwan's industry is tied to infrastructure. No matter which country leads in AI development, it will be difficult to decouple from Taiwan.
He called on local companies to be confident and proactive, encouraging collaborative growth. In Liu's view, Taiwan is not merely a participant in the AI supply chain—it's a critical enabler.
Navigating the AI evolution
Liu laid out his view of AI's developmental trajectory in three stages: specialized AI, general AI (AGI), and superintelligent AI (ASI). According to him, we are now in the early stages of AGI, where machines begin to exhibit human-like understanding and reasoning. The timeline for reaching ASI, however, remains uncertain.
He also described four stages of AI application: perception AI, generative AI, agentic AI, and the still-emerging embodied AI. Perception and generative AI are already booming, while agentic AI—AI that can act on behalf of users—is beginning to see practical adoption. Next, Liu predicted, will be the rise of physical AI agents capable of interacting with the real world.
Foxconn, he said, is actively preparing for this shift. The company is integrating AI across its operations through three core pillars: hardware vertical integration, global infrastructure deployment, and enterprise software platforms.
Within the company, AI has been deployed to improve internal efficiency—ranging from administrative procurement to the consolidation of production part numbers. Liu revealed that Foxconn hopes to save up to NT$10 billion (approx. US$307 million) annually in procurement costs through AI-driven optimization.
He also cited Foxconn's strategic efforts across three major AI-related platforms: smart manufacturing, smart electric vehicles (EVs), and smart cities.
Trade tensions create a cloud of uncertainty
While Liu struck a confident tone on AI, he also warned that unpredictable trade policies—particularly from the US—could pose risks to Taiwan's tech sector. Asked about the potential for so-called "secondary tariffs" targeting countries closely tied to China, Liu emphasized the importance of free trade.
Though Taiwan has been granted a 90-day reprieve from some new US tariff measures, uncertainty looms large. "It's impossible to say the impact will be zero," Liu acknowledged. "The real question is how we reduce it."
Foxconn, he noted, began regionalizing its manufacturing footprint four to five years ago in anticipation of such shifts. That head start, he said, has helped the company absorb the recent wave of policy changes more easily than others.
Still, Liu confirmed that tariffs remain the top concern for clients today. He added that no one knows what the outcome will be, and the biggest problem right now is the uncertainty.
As for recent US restrictions on Nvidia's H20 chip sales to China, Liu said the issue would need to be addressed by the clients directly.
Balancing strengths and gaps
Despite Taiwan's unmatched hardware capabilities and chip supply chain, Liu noted one key vulnerability: the imbalance between hardware and software development. He believes Taiwan's robust manufacturing base can act as a springboard to foster a stronger software ecosystem.
Liu stated that Taiwan is an indispensable supporter of global AI development and a reliable partner in building AI ecosystems worldwide. Through open collaboration and shared prosperity, Taiwan can play a central role in the AI age.
Article edited by Jack Wu
