Taipei, Taiwan - The US and Taiwan reached a cooperation agreement on artificial intelligence, semiconductors, and drones, formalized as part of the so-called "Pax Silica Declaration".

The declaration is a US initiative to secure supply chains that are vital for the development of key technologies such as AI and semiconductors, which are crucial for security.

It features nine signatories, including Australia, Israel, and the UK, as well as five non-signatory participants, of which Taiwan is one.

"Taiwan is a vital partner on these and other important economic initiatives, and its advanced manufacturing sector plays a key role in fueling the AI revolution," the State Department wrote in a statement.

"Discussions focused on highlighting progress in responding to economic coercion, pursuing mutual cooperation in third countries, and addressing tax-related barriers to increase investment between the United States and Taiwan."

The agreement comes at a time when tensions between China and Taiwan have reached boiling point, with Beijing increasing military drills and incursions into the island's airspace.

China has further sanctioned numerous US firms over sales of weapons, materials, and key resources to Taiwan.

In November, China's Taiwan Affairs Office declared that Beijing "will crush all foreign interference" over Taiwan in response to a major arms deal that Taipei secured with Japan.