Taiwan and Phoenix Forge Tech Alliance in "Silicon Desert"

TAIPEI, TAIWAN – January 16, 2026 – A major new technology corridor is being paved between Taiwan and the American Southwest, formalizing a strategic partnership aimed at dominating the next wave of innovation in artificial intelligence, semiconductors, and health technology.

Startup Island TAIWAN, the national startup brand guided by Taiwan's National Development Council (NDC), has signed a landmark Memorandum of Understanding (MOU) with the City of Phoenix, the Greater Phoenix Economic Council (GPEC), and the newly formed Tesoro Venture Capital. The collaboration, which also involves Taiwan's prestigious Industrial Technology Research Institute (ITRI), aims to create a powerful transatlantic pipeline for high-tech startups, building on the multi-billion dollar expansion of Taiwan Semiconductor Manufacturing Company (TSMC) in Arizona.

The agreement, witnessed by officials from the American Institute in Taiwan (AIT) and Taiwan's Ministry of Economic Affairs, marks a significant evolution from ad-hoc projects to an institutionalized framework. It is designed to create a seamless "soft-landing" for Taiwanese tech firms entering the U.S. market and, conversely, to connect American innovators with Taiwan's formidable manufacturing and R&D ecosystem.

From Desert Sands to a Global Tech Hub

Phoenix, once known more for its climate than its code, is rapidly cementing its reputation as the "Silicon Desert." The new MOU is the latest and most formal step in a deliberate strategy to transform the region into a global technology hub. This effort is anchored by TSMC's massive investment, which is projected to exceed $100 billion and create a gravitational pull for the entire semiconductor supply chain.

The partnership is facilitated by the Greater Phoenix Economic Council (GPEC), an organization with a 36-year history of assisting over 1,075 companies and attracting more than $76 billion in capital investment. "Since signing an MOU with Startup Island TAIWAN in 2023, the two sides have established a physical showcase site in Phoenix's biomedical innovation district," noted GPEC President and CEO Christine Mackay, highlighting the tangible progress that led to this expanded agreement.

Phoenix's appeal is multifaceted. The region's venture capital scene is bucking national trends, with funding increasing 6% to $1.9 billion in 2023 while declining 36% nationwide. Mayor Kate Gallego emphasized that Phoenix offers a comprehensive support system. "Phoenix is not only a major U.S. semiconductor hub, but also an innovation gateway integrating AI, talent, and capital," she stated, pointing to corporate partners, local resources like the Mayo Clinic accelerator, a high quality of life, and direct flights to Taipei as key assets for startups looking to "land and scale rapidly."

This economic partnership is underscored by a deeper geopolitical current. In an era of global supply chain disruptions and strategic competition, the U.S. is actively working to bolster its domestic technology base and strengthen ties with key democratic allies. The collaboration serves as a model for "friend-shoring," creating resilient and secure innovation networks in critical sectors. The American Institute in Taiwan (AIT) recognized this, reaffirming its support for the initiative and praising Taiwan's "outstanding performance" across a range of advanced technologies.

A Blueprint for Startup Success

For Taiwanese startups, the Phoenix corridor offers a proven pathway into the lucrative and complex U.S. market, particularly in the heavily regulated healthcare sector. The collaboration builds on two years of successful pilot projects that have already yielded significant results.

Deputy Minister Jan Fang-Guan noted that previous cooperation has enabled several Taiwanese biomedical teams to achieve U.S. FDA approvals and complete clinical proof-of-concept (POC) validations. Officials highlighted several of these success stories as a testament to the program's potential:
* JelloX: The AI-powered 3D pathology imaging company collaborated with the world-renowned Mayo Clinic in Phoenix to complete its clinical validation for colorectal polyp diagnosis, subsequently obtaining U.S. FDA clearance.
* Brain Navi: A pioneer in medical automation, the company received U.S. FDA approval for its brain surgery robotic system, a significant milestone demonstrating Taiwan's global competitiveness in AI-driven medical devices.
* Aesop: This startup's AI-based clinical diagnostic reasoning model has successfully completed POC validation in American healthcare settings, proving its ability to optimize clinical workflows.

These cases exemplify the synergy at the heart of the MOU. Phoenix, with its large retirement community and world-class medical institutions, provides concentrated clinical demand and a mature testing ground. Taiwan, in turn, provides cutting-edge AI and medical technology solutions ready for deployment. This symbiosis accelerates market validation for Taiwanese startups while delivering innovative tools to U.S. healthcare providers.

Building an Institutionalized Innovation Engine

The new MOU is designed to move beyond individual successes and create a scalable, long-term engine for co-development. A key player in this is Tesoro Venture Capital, a Phoenix-based accelerator founded by Andy Lombard.

Tesoro plans to cultivate 200–300 startups over the next five years, backed by large-scale investments in AI and semiconductors. Lombard stressed the importance of a holistic approach, aligning industry giants like TSMC, Cadence, and Amkor with consistent government policy. He proposed establishing an executive committee with leaders from all signatory organizations to set goals and ensure execution. "Over the next five years, Tesoro plans to cultivate 200–300 startups by integrating large-scale investments in AI and semiconductors," Lombard stated, emphasizing a focus on talent and workforce development to translate the agreement into concrete action.

The collaboration will focus on key future-facing industries, including AI healthcare applications, advanced manufacturing, photonics, and defense-related technologies. By integrating Taiwan's deep talent pool and community resources, the partnership aims to build scalable industrial clusters in Arizona, with small and medium-sized enterprises (SMEs) forming a critical foundation for growth.

Through institutionalized cooperation, including bilateral exchanges, industrial validation, and investment matchmaking, the partners intend to cultivate a new generation of internationally competitive technology startups. This framework is not just about fostering individual companies but about creating measurable economic outcomes that strengthen the long-term technological and economic partnership between Taiwan and the United States.