Taiwan’s scientific government warns that chips may suffer from spending cuts.

Taipei (Reuters) : After opposition parties enacted legislation mandating cuts to economic and technology investment, Taiwan’s science ministry issued a warning on Friday that funding for sectors including semiconductors, artificial intelligence, and aerospace might be slashed by T$20 billion ($609.11 million) for the upcoming year.

The governing Democratic Progressive Party (DPP) and hundreds of demonstrators fiercely rejected the law last week that Taiwan’s opposition parties, which have a majority in parliament, approved to shift government expenditures to local governments.

Taiwan’s Ministry of Science and Technology estimate follows the Ministry of Economic Affairs’ warning on Tuesday that Taiwan’s international AI technology partnerships could be impacted by inadequate future budgets and that the country’s collaboration with tech companies like Micron, AMD, and Nvidia could be affected.

According to its estimates, the economic ministry would decrease spending by T$29.7 billion in the upcoming year, with T$11.6 billion going toward technology project cuts.

Taiwan’s largest foreign direct investment has been Micron. With some government financing backing, Micron, AMD, and Nvidia submitted applications to the Taiwanese government for technical cooperative initiatives.