How Taiwan and Israel used innovation to turn challenges into strength and partnership
As Israel faces shifting alliances and new geopolitical realities after October 7, its ties with Taiwan have only strengthened. Bound by shared threats and a vision of economic resilience, the two nations are deepening collaboration in semiconductors, AI, and cybersecurity - turning technological innovation into a strategic advantage.
Since October 7, Israel has found itself navigating old alliances - some openly strained and others quietly eroded. However, certain partnerships have only grown stronger. One of the most unexpected yet consequential is Taiwan - the small but technologically formidable island nearly 8,000 kilometers away which, like Israel, sits at the crossroads of innovation and geopolitical pressure.
Both nations have pursued policies of technological innovation, see economic resilience as a matter of national security, and both operate under the looming shadow of war. In Israel’s case, it is an increasingly hostile Middle East; for Taiwan, it is the ever-present threat of China. Amid the turbulence in both regions, Taiwan has quietly become one of Israel’s closest allies on the diplomatic stage and has only deepened economic and technological ties.
This growing partnership is reflected in the Taipei Economic and Cultural Office in Tel Aviv, first established in 1993, which serves as Taiwan’s diplomatic and commercial bridge to Israel. Diplomatic protocol prevents Taiwan from establishing formal embassies in many parts of the world, but this hasn’t hindered the head of Taiwan’s mission, Representative Abby Lee, in her efforts to promote closer ties between the two nations. “Over the past three decades, we’ve built strong ties in science, investment, education, and trade,” she says. “This serves as an important foundation for the two nations to move forward.”
For Lee, the connection between the two nations is more than just strategic - it’s a relationship built on deeply similar values, goals and challenges. Lee has served in Israel for three years, witnessing firsthand the country’s determination in the wake of October 7. “Even though Israel is fighting on multiple fronts, it remains willing to share knowledge with like-minded countries like Taiwan - knowledge that is much needed as we face tremendous pressures from China through its hybrid toolkits.”
Taiwan has long been a global center for technology and manufacturing. It produces over 60% of the world’s semiconductors and nearly 100% of AI chips, earning it the nickname “the silicon shield.” Tech giants like NVIDIA, Amazon, Google, and Microsoft have all established a presence on the island, recognizing its unparalleled expertise in deep tech.
Lee notes that the drive to build Taiwan as an economic and technological center is, as for Israel, a matter of survival. “Both countries lack natural resources. We have to invest in human capital and education - those are our weapons.”
The economic relationship between Israel and Taiwan is growing stronger, particularly in areas where their strengths complement each other. “Israel is famous for startup innovation - taking ideas from zero to one. Taiwan, on the other hand, has the high-tech talent and industrial capacity to scale those ideas from one to infinity,” Lee explains.
Taiwan excels in hardware; Israel leads in software, cybersecurity, and AI. The synergy is clear, with Taiwanese giants like the Taiwan Semiconductor Manufacturing Company (TSMC) investing in Israeli semiconductor startups and Taiwanese companies opening R&D or sales offices in Israel, such as Winbond, ASUS, Merida, Vivotek, Nuvoton, and more. Likewise, Israeli companies are opening offices in Taiwan including Nova, Radware, Taboola and OurCrowd.
Patty Lin, Director of the Taiwan Trade & Innovation Center in Tel Aviv (TAITRA), describes Taiwan as “a very good place for Israeli startups to start if they want to enter the Asian market.” Unlike most TAITRA offices, which focus solely on trade, the Tel Aviv branch is dedicated to fostering innovation. “Every month, we connect Israeli startups with Taiwanese companies, send them to exhibitions, and facilitate collaboration in key areas like semiconductors, AI, and medical technology.”
One of Taiwan’s greatest strengths, she notes, is its industrial stability. “Taiwan isn’t growing as fast as some emerging markets in Asia, but it’s growing steadily every year. That stability is crucial for foreign investors, especially in high-tech fields where long-term planning is necessary.” Its strategic location also makes it an ideal launchpad for Israeli firms eyeing broader expansion into Asia.
Dov Moran, the Israeli entrepreneur behind the USB flash drive and managing partner at Grove Ventures, has worked closely with Taiwan’s tech ecosystem for decades. “Taiwan became an important hub for all activities in East Asia. The people there are amazing - excellent engineers, incredibly hardworking, and extremely organized,” he says.
Moran’s connection with Taiwan dates back to 1994 when he opened an office there while leading M-Systems. Since then, he has maintained close ties with TSMC and other Taiwanese firms. “Israel is strong at entrepreneurship and ideation, but we struggle with execution. Taiwan excels at that. Their ability to perform and deliver is unmatched.”
His experience reflects a broader trend of Israeli entrepreneurs and investors looking to Taiwan as a key partner in tech development. “Deep tech is Taiwan’s specialty. If you’re working in semiconductors, materials, space, or AI, there’s no better place to collaborate,” said Moran. Taiwanese investors, in turn, are increasingly drawn to Israeli startups, particularly in the fields of AI and cybersecurity. “We have Taiwanese investors in our fund; some are corporate VCs looking to expand their business, identify new tech, and understand market trends.”
Alon Webman, co-founder of Chain Reaction, a semiconductor startup with offices in Israel, the U.S., and Taiwan, has also built strong ties with Taiwan’s industry. “From day one, we needed strong connections with TSMC - they are the number one ASIC manufacturer in the world. Taiwan has positioned itself as a global player, and working with them has been essential to our success.”
Webman stresses that Taiwan is far more than just a manufacturing hub - it’s a country that actively fosters innovation. “We’re based in the Science Park in Hsinchu near TSMC. The level of collaboration and access to talent is unmatched.”
He says that Taiwan’s government and industry ecosystem have been crucial in supporting their growth. “The way that Taiwan supports its tech companies is something every country should learn from. It’s a national effort - Israel could benefit from adopting a similar approach to supporting its high-tech industry.”
Geopolitical challenges and future prospects
For Taiwan, October 7 was a reminder of the vulnerabilities faced by small democracies in volatile regions. “Taiwan saw October 7 as more than just a regional conflict - it was a clash between democracy and terrorism and authoritarianism. We were among the first to express our solidarity and our relationship with Israel has strengthened,” says Lee, for whom Israel’s struggle resonates deeply.
Taiwan continues to confront growing threats from China, which claims the island as its own and has intensified military posturing, economic coercion, and cyber warfare to assert control. Beijing has repeatedly signaled its willingness to use force, conducting large-scale military exercises around Taiwan, pressuring foreign governments to sever ties, and leveraging its influence to isolate Taipei on the global stage.
Taiwan has developed itself into an economic and technological hub, partly as a form of deterrence. Its unparalleled dominance in semiconductors has made the nation an indispensable pillar of the modern economy, producing over 60% of the world’s chips and nearly 100% of AI chips. “If China invades Taiwan, it would be catastrophic for the entire semiconductor industry. If you use an iPhone, that might be your last iPhone,” says Moran.
The global reliance on Taiwanese chips has deterred, but not eliminated, Beijing’s aggression, as any disruption would send shockwaves through supply chains and economies worldwide. “This isn’t just in Taiwan’s interest,” Lee stresses. “It’s a shared interest for the entire world.”
Such indispensability is something many in Israel’s tech sector seek to emulate. Like Taiwan, Israel has long seen innovation as not merely a matter of competitive advantage, but a form of strategic defense. But many feel that it is no longer enough for Israel to simply be the startup nation; global economic ties must be so deep and Israel perceived as so critical to global technology that its stability becomes an international priority, such that the world cannot afford to look the other way or align with its adversaries when Israel is under threat.
Meanwhile, though China remains Israel’s largest trade partner, Moran, who has worked extensively with both Taiwan and China, sees Taiwan as Israel’s stronger and more reliable tech partner - something which will only grow and take precedence in the future. “China is behind Taiwan in almost everything related to deep tech and semiconductors. Israeli companies are moving towards Taiwan,” he says.
Webman echoes this sentiment, emphasizing that Taiwan’s ability to execute technological projects at a national level makes it a crucial partner for Israel. “Taiwan is a lighthouse for technology and manufacturing. The way they treat companies, the resources they provide - it’s something every country should study.”
