Lai told AFP in his first interview with an international news agency since taking office in 2024 that Taiwan also supports the island's semiconductor companies investing overseas, including in Europe.

Taiwan has stepped up efforts to strengthen security and economic ties with Europe, its third-largest export market, at a time when questions have been raised over US willingness to defend the island against a Chinese attack.

China claims Taiwan is part of its territory and has threatened to use force to bring the self-governed island under its control.

"I would like Taiwan and Europe to enhance cooperation in the defence industry and on defence technology," Lai told AFP on Tuesday in an exclusive interview at the Presidential Office Building.

Lai added that Taiwan, which makes nearly all of the world's most advanced chips, is also eager to "work with Europe on joint development in AI and usher in an era of comprehensive smart transformation."

The ongoing war in Ukraine, where devastating drone attacks have been a key feature of the years long conflict, has offered valuable lessons for Taiwan's government as it plans for a potential attack by China.

Lai praised "European efforts to uphold universal values and their support for Ukraine's resistance against the Russian invasion".

"Taiwan also stands with the Ukrainian people," Lai said.

Taiwan has ramped up military spending over the past decade and is building up its defence industry to make more equipment and ammunition on the island.

But Taipei is under US pressure to do more on defence -- and for its semiconductor manufacturers to increase production capacity in the United States.

Advanced chips are not only the bedrock of AI development, but also essential in new generation technologies and equipments.

The concentration of chip production in Taiwan has long been seen as a protection against an attack by China and an incentive for the United States to defend it.

Lai said his government supports the semiconductor industry's investments overseas. TSMC, the world's largest contract chipmaker, has expanded into the United States, Japan and Europe.

But for Taiwan to remain indispensable in the global supply chain, Lai said the island's semiconductor industry needs to keep its "centres for research and development, the most advanced manufacturing processes, and the largest production capacity".

"No single country in this supply chain can be missing," Lai said.

"For this reason, the Taiwanese government supports the semiconductor industry's investments in Japan, the US and Europe."

Ahead of US President Donald Trump's planned meeting with Xi in Beijing in April, Lai said Taiwan welcomed any talks that helped maintain the status quo.

"We believe President Trump is undertaking a difficult peace-building effort, which entails safeguarding US interests and deterring Chinese expansionism in the short term," Lai said.