"In the face of authoritarian expansionism and the challenges of the post-pandemic era, Taiwan seeks to bolster cooperation with the United States in the semiconductor and other high-tech industries,” Taiwan President Tsai Ing-wen said in a meeting with the visiting governor of the US state of Arizona, Doug Ducey, on Thursday.

"This will help build more secure and more resilient supply chains. We look forward to jointly producing democracy chips to safeguard the interests of our democratic partners and create greater prosperity,” Tsai added.

In response, Ducey said, "TSMC's legacy investment has elevated the potential for what's possible between Arizona and Taiwan. Arizona stands with Taiwan, and we look forward to building on the many opportunities ahead."

Market reaction

Growing trade relations between Taiwan and the US are unlikely to go down well with China, which could deepen the risk aversion and exacerbate the pain in the Chinese proxy, the AUD.

AUD/USD was last seen trading at 0.6815, down 0.34% on the day.