AGP Executive Report

Cross-Strait Security: Taiwan’s coast guard reported a tense standoff with a Chinese vessel near the Pratas Islands, after warnings were ignored and the ship turned into restricted waters. Defense Tech: Taiwan carried out the first sea-based live-fire test of the Altius-600M loitering munition, validating a full “find-to-strike” engagement chain to complicate any amphibious landing plan. China’s Pressure Campaign: A mainland spokesperson condemned Taiwan’s DPP over alleged smearing of the Straits Forum, accusing Taipei of undermining cross-strait exchanges for political gain. US-Taiwan Politics: KMT chair Cheng Li-wen told a Harvard seminar that peace can be maintained if Taiwan avoids “de jure independence,” stressing deterrence and dialogue. AI Supply Chain & Markets: TSMC warned advanced AI chip demand will outstrip supply for years, while Wall Street took a hit as semiconductors sold off sharply. Tech Industry Spotlight: At Computex 2026, Taiwan’s PC makers leaned into cooperation as Apple’s MacBook Neo pushed the market toward budget-friendly designs. Weather Watch: Tropical Depression Ester kept TCWS No. 1 up over Batanes and is expected to move toward Taiwan, with minimal to minor threat there.

Cross-Strait Security: Taiwan reported another tense coast-guard standoff near the Pratas Islands, with a Chinese vessel “forcing its way” into restricted waters and both sides trading verbal warnings. AI & Industry: Nvidia CEO Jensen Huang wrapped up a Taiwan trip and said Nvidia has doubled capacity for the second half of 2026 to meet strong demand, while Foxconn raised its Q2 outlook after record May performance and Intel/TSMC remain central to the AI supply chain. Tech Showcase: COMPUTEX 2026 in Taipei drew 111,312 buyers/visitors from 152 regions and highlighted “physical AI” and robotics as the next industrial frontier. Politics & Diplomacy: China banned four New Zealand MPs for a year over a Taiwan visit, prompting New Zealand and Australia to protest. Markets: Taiwan shares closed down 1.33% after a wild session as US tech weakness hit sentiment, with financial stocks helping steady the index. Local Life: The Formosa Railroad Bento Festival opened at Taipei Main Station with record booths and dozens of bento varieties.

Cross-Strait Security: A leaked video allegedly showing Singapore troops training in Taiwan is being read as Taipei signaling deterrence as it watches for any US-China deal that could weaken island defense. Diplomatic Fallout: China imposed travel bans on four New Zealand MPs after their Taiwan visit, warning they crossed the “red line” and citing one-China; New Zealand and Australia said they’re concerned and may protest. Tiananmen Anniversary Clash: People in Taiwan marked June 4, 1989 with candlelight vigils, while China and Taiwan traded accusations over US Secretary of State Rubio’s remarks, with Beijing calling them “smearing” and Taipei urging China to face history. Energy Strategy: Taiwan’s CPC plans to raise equity oil and gas offtake from overseas projects to 10% of imports by 2030 to boost energy security and cut reliance on geopolitically sensitive regions. Tech & Industry: At Computex, Intel and Nvidia partnerships and new AI hardware kept Taiwan in the spotlight, while TSMC again warned chip supply may not meet AI demand for years. Markets: US forced-labor tariff proposals include Taiwan, adding uncertainty for regional trade.

Cross-Strait History Row: Taiwan urged China to face the truth about the June 4, 1989 Tiananmen crackdown as Beijing hit back at U.S. Secretary of State Marco Rubio for “smearing” China’s political system. Diplomatic Fallout: China imposed a one-year travel ban on four New Zealand lawmakers over a Taiwan visit, saying they crossed a “red line” on the one-China principle; Wellington called it unprecedented. AI Chips Watch: TSMC CEO C.C. Wei said the firm is “not afraid” of competition and expects strong AI-driven demand for years, while warning it can’t meet all customer needs soon and won’t mimic memory-chip price hikes. Semiconductor Supply Pressure: Bloomberg reported TSMC’s AI chip supply will fall short for years, keeping capacity as the key bottleneck. U.S. Forced-Labor Tariffs: The U.S. proposed new Section 301 tariffs on 60 trading partners over forced-labor concerns, including Taiwan, prompting Taiwan to set up an interministerial review mechanism to restrict forced-labor-linked imports. Defense & Deterrence: Taiwan plans to expand its anti-ship missile arsenal to over 1,800 units by early 2029 to deter China’s blockade or invasion. Drones for Global Markets: ITRI became a U.S.-recognized Green UAS evaluation body, aiming to help Taiwanese drone firms win certification and expand abroad. Finance for Foreign Residents: Taiwan launched a one-stop banking initiative with six banks to make account opening, credit cards, and international transfers easier for foreign residents.

Cross-Strait Security & Diplomacy: Taiwan’s maritime stance is again in focus as Taipei calls for Japan and the Philippines to respect its EEZ rights in sea-border talks, while China keeps up military pressure near the island with reported PLAN vessels and PLA aircraft sorties. Tech & Industry: Computex 2026 in Taipei put Taiwan’s AI hardware push front and center, with Nvidia’s Jensen Huang drawing attention for both major chip announcements and a viral on-stage moment, alongside broader themes like agentic AI and “physical AI” driving demand across the supply chain. Trade Policy Shock: The U.S. is moving toward new Section 301 tariffs tied to forced-labor findings, proposing 10%–12.5% levies on 60 economies including Taiwan, a move that could ripple through Taiwan’s export-linked manufacturing. Energy Logistics: A strike-linked delay at Australia’s Ichthys LNG operations is affecting LNG loading and exports, with downstream timing impacts for shipments under a contract involving CPC. Regional Politics: New Zealand MPs who visited Taiwan have been banned from entering China, Hong Kong and Macau for a year, underscoring Beijing’s growing pressure on Taiwan-facing lawmakers.

U.S. Forced-Labor Tariffs: The U.S. Trade Representative has proposed new 10%–12.5% tariffs on imports from 60 economies, including Taiwan, after finding they failed to effectively enforce bans on forced-labor goods—an effort aimed at rebuilding Trump’s tariff pressure after court setbacks. Cross-Strait & Maritime Pressure: Taiwan urged Japan and the Philippines to consult it over planned maritime boundary talks, warning the area overlaps with Taiwan’s rights and interests, as China expanded coastguard patrols east of Taiwan tied to the Japan-Philippines process. AI Chip Boom Hits Taiwan Markets: Taiwan shares closed at a fresh high, led by TSMC and AI-linked buying after a U.S. tech rally, while Nvidia and Marvell executives at Computex highlighted connectivity as the next engine for AI infrastructure. Local Economy & Energy: Taiwan’s emissions estimate for 2025 is about 9% below 2005 levels, narrowly missing the 10% target, and the government will inspect aging wind turbines after a Yunlin turbine fire. Business & Governance: ASE topped TWSE firms for average employee pay in 2025, and Taiwan indicted a former TECO Guam director over alleged expense and subsidy fraud. Security Tech: Taiwan’s weapons institute previewed “robot dog” systems for island patrols and inspections in the South China Sea.

AI Powering Taiwan’s Tech Push: Schneider Electric unveiled an 800VDC “sidecar” power system for AI data centers, moving power conversion outside server racks to cut losses and boost delivery for next-gen Nvidia GPUs. Cross-Strait & Security Watch: Taiwan says it should be included in Japan-Philippines maritime boundary talks east of Taiwan, while China’s coast guard patrols and Beijing insists the area is its EEZ and continental shelf. US Policy on Taiwan: Secretary of State Marco Rubio told senators the US “status quo” policy on Taiwan is unchanged, but a major $14bn arms sale remains under review. Local Defense Tragedy: Taiwan’s air force suspended T-34C training flights after a crash killed two pilots; an investigation is underway. Computex Tech Race: Intel called Nvidia’s PC-chip competition “a good thing,” as Nvidia pushes AI PCs and agents. Nvidia Pay Debate: Nvidia CEO Jensen Huang urged companies to pay workers “as much as possible,” pointing to the AI boom’s pressure on labor expectations. Regional Cyber Threats: A spear-phishing campaign dubbed “Operation Dragon Weave” targeted government, research, tech, and finance in Taiwan and the Czech Republic.

Defense & Safety: Two Taiwanese air force pilots died in a T-34 training jet crash at Gangshan Air Base in Kaohsiung, with the Air Force launching an investigation after the exercise simulated an engine failure. Tech & Economy: Taiwan shares hit a new high as Computex Taipei drew fresh AI optimism, with TSMC leading gains after Nvidia’s latest PC-focused AI push. AI Chips & Memory Race: Nvidia unveiled the RTX Spark “superchip” for Windows AI PCs, while Samsung Display and Samsung Electronics showcased next-gen OLED gaming and a first HBM5 mock-up; SK hynix said it plans to double wafer capacity over five years. Cross-Strait Politics: Taiwan President Lai said maintaining the political status quo is key to securing global supply chains, as China’s foreign ministry reiterated that both sides of the Strait belong to “one China.” Healthcare & Law: Taiwan revoked a doctor’s license over illegal organ transplant referrals to China, marking the first such license revocation for organ-brokering. Regional Security: China’s coast guard conducted patrols east of Taiwan amid Japan-Philippines maritime talks, underscoring ongoing grey-zone pressure. Business & Travel: China Airlines unveiled a new Premium Economy cabin theme for its B787 Dreamliners, adding Taiwan-inspired design touches.

US-Taiwan Trade Deal: Taiwan says a new agreement with Washington cuts tariffs on Taiwanese shipments to 15% (from 20%) and boosts U.S. semiconductor investment, with Premier Cho calling it a “home run.” KMT US Outreach: KMT leader Cheng Li-wun begins a two-week U.S. tour to promote cross-strait peace through dialogue, including meetings with lawmakers and a think tank. China vs. Press Freedom: China expelled a New York Times reporter after an event in New York featuring Taiwan President Lai, while Taiwan condemned Beijing and accused it of undermining press freedom. AI Chip Race at COMPUTEX: Nvidia used Taipei to unveil RTX Spark, aiming to bring “personal AI agents” to Windows laptops and desktops this fall, while Micron showcased AI memory and storage for the next wave of data centers. Taiwan Security Watch: Taiwan-linked reporting highlights rising regional tensions, including Chinese coast guard patrols near Taiwan and renewed debate over how allies should share defense burdens. Markets & Energy: Oil jumped after Iran suspended talks with the U.S., adding pressure to global equities as investors weigh supply risks.

Taiwan-US Politics: KMT chair Cheng Li-wun said she is “very willing” to meet U.S. President Donald Trump during her two-week trip, aiming to build “deeper trust” after her April visit to Beijing and amid scrutiny over the party’s defense cuts. Cross-Strait Tensions: China hit back at the New York Times for platforming “Taiwan independence” and for calling Taiwan a “country,” while China Coast Guard patrols continued east of Taiwan tied to Japan-Philippines maritime talks. Computex Taipei Tech Boom: Nvidia CEO Jensen Huang kicked off Computex with a push for AI PCs, unveiling the RTX Spark chip for Windows laptops and desktops, and saying Nvidia will spend up to $150 billion a year in Taiwan; Taipei Mayor Chiang also said Nvidia will help modernize the Wenhu Line with AI simulations. Semiconductor Supply Chain: Taiwan’s manufacturing stayed in the “green” zone in April as AI demand supported electronics and machinery, even as Middle East shocks weighed on some trade indicators. Defense & Diplomacy: Czech Senate President Miloš Vystrčil said China can’t dictate who the Czech Republic befriends and invited Taiwan’s Legislative Speaker Han Kuo-yu for a visit. Industry Announcements: Samsung Display showcased a full gaming OLED/QD-OLED lineup for Computex, while Himax said its new T2000 color ePaper controller is powering E Ink’s 75-inch Kaleido signage.

Japan-China Security Clash at Shangri-La: Japan’s defense minister Shinjiro Koizumi rejected Beijing’s “new militarism” label, saying Tokyo’s defense build-up is transparent and pointing to China’s nuclear arsenal and lack of transparency. The remarks underscored rising tensions tied to the Taiwan Strait. Cross-Strait & International Pressure: China condemned Czech Senate President Milos Vystrcil’s Taiwan visit, repeating its one-China stance and warning Prague to stop official exchanges with Taiwan. Taiwan-China Tech Security: Taiwan prosecutors suspect a shipment of Nvidia AI chips was smuggled to China via deceptive export paperwork, with an investigation ongoing into possible national security and IP violations. Taiwan Strait Gray-Zone Monitoring: Taiwan’s coast guard said China has increased patrols near the Pratas (Dongsha) Islands since 2024, using repeated maneuvers and AIS shutdowns to test Taiwan’s response. Local Life & Costs: Summer electricity rates take effect, with Taipower estimating most households will pay about NT$446 more per month. Sports: Taiwan won bronze in the men’s 4x100m at the U20 Asian Athletics meet in Hong Kong.

Taiwan-Defense & Cross-Strait Deterrence: President William Lai said Taiwan will strengthen defense and economic resilience to deter China, citing political pressure, military intimidation and “united front” tactics, while urging dialogue only on equal terms. US-Taiwan Arms Deal: The Pentagon chief Pete Hegseth publicly downplayed links between a paused US$14 billion Taiwan weapons package and the Iran war, contradicting a deputy’s earlier explanation and keeping the deal’s timing in focus. China Military Signals: Satellite reporting says China is building dozens of nuclear launch pads and hardened infrastructure near its missile silos in Xinjiang, raising second-strike concerns amid rising Taiwan tensions. Regional Security Messaging: At Singapore’s Shangri-La Dialogue, Hegseth urged Asian allies to raise defense spending and spoke more softly on China, while avoiding direct mention of Taiwan. Tech & Economy: Nvidia and Microsoft are set to unveil the first Windows PCs powered by Nvidia chips next week, with Computex in Taiwan and Microsoft’s Build in San Francisco as key stages. Civil Society & Identity: NGOs said they quit GlobalGiving after it adopted “Chinese Taipei” instead of “Taiwan,” warning the move could invite further restrictions on Taiwan-based groups. Local Life: Taipei’s Ximending expands a smoke-free push from June 1, with fines up to NT$10,000.

Defense & Deterrence: U.S. Defense Secretary Pete Hegseth urged Asian allies to boost defense spending, warning of “rightful alarm” over China’s military buildup while taking a more measured tone than last year and insisting there’s “no change” on Taiwan arms policy. Cross-Strait & Security: Taiwan’s Danjiang Bridge opened to the public as the world’s longest single-mast cable-stayed bridge, built for major earthquakes and extreme weather. Energy Prices: State-run CPC will keep Taiwan’s domestic gasoline and diesel prices steady next week, absorbing losses as crude costs ease. Power Costs: Taipower reported an April pre-tax deficit of NT$4.7 billion, driven by higher LNG fuel costs linked to Middle East conflict. Economy & Rates: Taiwan’s central bank is expected to hold interest rates steady for a 9th straight quarter despite strong AI-fueled growth. Media & Diplomacy: The U.S. revoked a Xinhua journalist’s visa in apparent retaliation after China expelled a NYT reporter tied to a Taiwan president event. Public Health: Taipei’s Ximending will ban smoking from June 1, with fines up to NT$10,000. International Cooperation: Taiwan will send its first medical mission to St. Kitts and Nevis starting June 1.

Taiwan Strait & regional security: Taiwan says it detected multiple Chinese military sorties and vessels around the island, as the Shangri-La Dialogue opens in Singapore with the U.S., Japan and Taiwan pushing deterrence and stability. Defense procurement: Taiwan’s Legislature approved an NT$8.8bn arms procurement budget, while analysts warn any U.S. pause on arms sales could push Taipei toward more asymmetric-defense tech. U.S.-China pressure & diplomacy: China condemned Japan-Philippines maritime talks as “illegal,” and also reacted to a Canadian warship transit through the Taiwan Strait. AI and chips in Taiwan: Nvidia CEO Jensen Huang is set to headline GTC Taipei at Computex, reiterating plans to spend about $150bn a year in Taiwan; SK Hynix also crossed $1tn valuation as AI demand lifts memory. Economy & finance: Taiwan raised its 2026 GDP growth outlook to a 16-year high on AI momentum, while Taiwan’s central bank signaled “timely” steps to keep financial stability. Health & society: Taiwan tightened entry rules for DRC and Uganda nationals over Ebola concerns, and a new tiny “sesame” sea slug species was identified from Keelung reefs.

Taiwan Economy & Finance: Taiwan’s central bank said it will take “timely” steps to protect financial stability amid uncertainty from US tariffs, China weakness and geopolitical risks, while Taiwan’s 2026 GDP growth outlook was raised to a 16-year high on strong AI and cloud infrastructure demand. AI & Industry at Computex: Nvidia and AMD are set to dominate Computex next week, with Nvidia CEO Jensen Huang pitching Taiwan as the “epicentre” of AI and vowing up to $150 billion a year in investment, while AMD plans to invest more than $10 billion; the focus is shifting from chips to AI infrastructure. Markets: Asian stocks climbed on hopes for a US-Iran ceasefire extension, lifting Japan and South Korea to fresh records and pushing Taiwan’s Taiex higher. Cross-strait & Defense Tensions: China again condemned Taiwan-related arms and maritime moves, while Taiwan’s defense procurement budget and debates over weapons delivery backlogs keep deterrence in the spotlight. Nuclear & Security Watch: Reuters reported China is building new launch-pad infrastructure near nuclear missile silos, underscoring intensifying second-strike capability concerns. Corporate Spotlight: Foxconn shareholders approved a record cash dividend as the company bets big on AI server demand.

Nvidia and Taiwan AI push: Nvidia CEO Jensen Huang said the company will spend up to US$150 billion a year in Taiwan, calling the island the “epicenter” of the AI revolution and linking the move to deeper ties with TSMC and local server makers. Defense and deterrence: China’s defense ministry urged the U.S. to handle the Taiwan question “with utmost prudence” amid reports the U.S. paused a US$14 billion arms sale over munitions needs tied to the Iran war. Security conference watch: Asia and other regions’ defense officials will open the Shangri-La Dialogue in Singapore, with Taiwan and South China Sea expected to feature in talks. Trade and tariffs: The U.S. reduced Section 232 tariffs on select Taiwanese auto parts, wood products, and civil aircraft components, while leaving the bigger semiconductor question open. Tech enforcement: Taiwan authorities arrested three suspects in a ring using Japan as a waypoint to smuggle Supermicro servers loaded with restricted Nvidia AI chips into China. Infrastructure resilience: Taiwan’s digital ministry said repairs to the Taima-2 submarine cable are progressing after damage near Tamsui, with service restored for Dongyin and Matsu peak hours protected.