TAIPEI -- Taiwan's government will safeguard the interest of its homegrown semiconductor companies, a top official said on Wednesday, addressing concerns about the potential impact of a U.S.-led chip alliance on Taiwanese tech industries.

Deputy Economic Affairs Minister Chen Chern-chyi said in a news conference on Wednesday that the purpose of the "Chip 4" alliance -- a framework to ensure a stable supply of vital semiconductors involving South Korea, Japan, Taiwan and the U.S. -- is mainly "to work with our partners to form a resilient supply chain."

He added that the group recently held a preparatory meeting. There is no official session planned yet for Chip 4 and none of the formal agendas have been decided. But the government will consult Taiwanese key industry players going forward, though it remains unclear whether topics like export controls are part of the deal, the minister said.

"A semiconductor industry is a globally collaborated industry," Chen said. "The manufacturing equipment comes primarily from the U.S. and Europe, the raw materials come from Japan, and manufacturing technology from Taiwan and [South] Korea. ... So this requires collaboration to form a very resilient supply chain."

Chen's comments come as key semiconductor industries have been closely linked with national security and are having to choose between China, a major trade player, and the U.S., a key security partner. The U.S. is reportedly set to introduce further export controls to limit critical equipment and technology falling into the hands of Chinese entities that Washington has flagged as security risks.

Because China is Taiwan's largest trading partner, the minister explained the dilemma: "I don't see [how] we can completely decouple from China. That's not realistic. So we will continue to see our companies working with their Chinese counterparts, or in business that the government is pleased to see [flowing]."

"With respect to national security, we will take measures including safeguarding our trade secrets, our key national key technologies, safeguarding our talent and not to be poached illegally," Chen added.

The deputy minister said it is a challenge to impose export controls on China if there are no clear clues that affected exports could be used for military applications. But his agency is "constantly reviewing the export control regime and constantly exchanges information with allies."

"If there are loopholes, we will plug them or fix them," Chen said.

Analysts expect this dilemma will become more intense amid rising tensions between the two powers and as Beijing amplifies pressure on neighboring Taiwan.

Taiwan exported $188.9 billion of goods to the world's second-largest economy in 2021, led by sales of machinery and integrated circuits, according to Taiwanese government data.

South Korea's situation is similar to Taiwan's, with China also being its largest trade partner. The U.S. policy discouraging Chinese participation in supply chains "has immediate detrimental implications for Korean manufacturers," a recent report by U.S.-based Peterson Institute for International Economics warned. South Korea's exports to China accounted for about 25% of its total exports, while its exports to the U.S. totaled about 15% in 2021. China is also the country's largest source of imports, the report noted, citing South Korean customs data.

Pan Chao-min, professor at Tunghai University in Taichung, told Nikkei Asia that "semiconductor nationalism" is on the rise and that Taiwan's leading role is being challenged.

The U.S. intends to rebuild its own semiconductor industry chain aligned with its national interest through the Chip 4 alliance and subordinate Taiwan's semiconductor manufacturing to the U.S. industry, he said.

At the same time, many Taiwanese chip enterprises have set up factories in China while Taiwanese parent companies are being forced to stop development of their Chinese subsidiaries, which is self-defeating, Pan warned. He added that Chip 4 is designed to serve U.S. interests and prevent all high-tech flows to China, including flows from Taiwan.

"Japan and South Korea certainly don't want their semiconductor industry to be controlled by the United States, but intend to build their own semiconductor industry chain, because this is about economic security and also about their core national interests," Pan said. "China is also an important market for Japan and South Korea, and China controls many key components."

A preliminary meeting on the semiconductor alliance between the four governments was held virtually on Sept. 28.

Economic Affairs Minister Wang Mei-hua confirmed on Sept. 30 that the U.S. held a meeting about the semiconductor supply chain in East Asia, with Japan, South Korea and Taiwan included. Foreign minister Joseph Wu told Nikkei Asia in a recent interview that semiconductors should include elements of democracy.

Last year, Washington proposed forming Chip 4 to secure the global semiconductor supply chain, coordinate policies, create subsidies, and perform joint research and development projects.

U.S. President Joe Biden signed into law in August the CHIPS and Science Act, which aims to increase the number of semiconductor chips made in the U.S.

Additional reporting by Kim Jaewon in Seoul