Lithuanian company sets domestic chip production target under Taiwanese deal

Lithuanian tech firm Teltonika has announced plans to launch domestic semiconductor production in 2027, utilizing Taiwanese technology. The announcement comes as Lithuania's Economy and Innovation Minister, Aušrinė Armonaitė, outlined the country's ambition to become a major player in the global semiconductor sector.

The production goal is part of a cooperation agreement between Teltonika and Taiwan's Industrial Technology Research Institute, valued at EUR 14 million, including a EUR 10 million grant from Taiwan's foreign ministry.

The agreement is seen as a way for Lithuania to withstand economic pressure imposed by China since the country allowed Taiwan to open a de-facto embassy in Vilnius in November 2021.

China, which considers Taiwan as its own territory, has downgraded diplomatic ties with Lithuania, disrupted trade, and pressured multinationals to remove the country from their supply chains since the representative office in Vilnius opened.

The European Union has since launched a World Trade Organisation challenge against China, accusing it of discriminatory trade practices against a member state.

Despite the pressure from China, Lithuania's trade with Taiwan has risen by around a third in 2022. In addition to Teltonika's partnership, other recent bilateral deals include a EUR 8 million credit from Taiwan's Eximbank to solar power module producer SoliTek and a EUR 3.5 million investment from venture fund Taiwania Capital to biotech startup Oxipit.

Minister Armonaitė stated that “This partnership with Taiwan will help Lithuania to move forward rapidly, match the world's strongest players and realize its ambitious goals.”

It remains to be seen how this partnership will impact Lithuania's relationship with China and the global semiconductor market.