Why Taiwan Matters To Global Technology – OpEd

The worldwide technology development of the future depends on Taiwan's semiconductor manufacturing industry. The Taiwan Semiconductor Manufacturing Company (TSMC) maintains its leading market position, which has turned the Taiwan sovereignty dispute into a major worldwide economic and technological security issue. The Taiwan Strait region faces such severe disruptions which would damage worldwide supply networks, block technological progress, and create economic instability across all nations. The Taiwan issue serves as a vital factor which affects both worldwide economic security and technological advancement.

The global foundry market share of TSMC exceeds 60 per cent while the company manufactures sophisticated semiconductor chips, which Apple, Nvidia and AMD use in their products. The concentration of capabilities has led analysts to identify Taiwan as a "silicon shield" because its position in worldwide supply networks functions as a protective mechanism which prevents conflicts because any disruption would create devastating effects. The protection system remains vulnerable because any blockade, invasion, or natural disaster would stop manufacturing operations, which would trigger a chain reaction of market disruptions worldwide.

The Taiwanese semiconductor industry functions as a fundamental economic power for Taiwan, yet it creates potential risks for the country. The pandemic exposed that Taiwan's manufacturing base supports various industries because its supply chain disruptions affected three major sectors, including automotive, defence, and consumer electronics manufacturers. The worldwide economic system recognises that Taiwan needs to stay stable because this stability enables multiple business sectors to expand their operations. The acquisition of TSMC by China would enable them to control a crucial technology centre, but the United States, together with its allies, must protect Taiwan's semiconductor industry because it supports their economic security and military defence capabilities.

The upcoming period will bring multiple major obstacles to overcome. First, the fragility of supply chains remains unresolved. The Taiwanese government needs to allocate funds across several years to develop domestic manufacturing capabilities because different nations have dedicated resources to building manufacturing plants inside their territories. The technological separation between China and the United States continues to grow faster because both countries work to become independent from each other, but building duplicate semiconductor fabrication facilities proves to be both costly and requires extensive time. The worldwide technological advancement will face delays because Taiwan encounters disruptions which prevent it from creating artificial intelligence and developing sophisticated defence systems. The region faces two major threats to stability because diplomatic efforts need to continue to prevent Taiwan Strait miscalculations, which endanger both regional security and worldwide economic systems.

International relations now incorporate economic and technological cooperation through various diplomatic programs which have emerged during the past few years. The United States and Taiwan have signed trade agreements which lower customs duties, while Taiwan dedicates funds to semiconductor and AI development through TSMC's factory construction initiative in the United States. The three nations of Japan, Taiwan and the United States have created a "semiconductor iron triangle" which unites their industrial policies with their joint research and development efforts. The European Union established the EU–Taiwan Semiconductor Industry Dialogue to bring together businesses, research organizations and diplomatic representatives for strengthening supply chain stability. The diplomatic initiatives prove that diplomatic efforts play a crucial role in establishing technological stability.

The solutions require diplomatic solutions to create economic and technological stability. The United States, Japan, and Europe need to expand their production facilities because this represents their main priority. These programs will establish new market competitors which will not immediately defeat Taiwan's current market dominance, but they will decrease the system's exposure to risks. The partnership with Taiwan needs to be strengthened because TSMC should join international cooperation programs to develop its semiconductor industry into a worldwide resource. The strategy would increase expenses, which instability creates for every involved party. The government needs to keep diplomatic relations because these diplomatic efforts will reduce tensions, which will stop economic competition from developing into military conflicts.

The development of innovation ecosystems which extend past Taiwan presents itself as a possible answer. Research and development collaboration promotion, together with expanded talent recruitment and modern technology funding, will decrease dependence on one central location. Supply chain redundancy can be achieved by using multiple suppliers and better logistics systems, which will help protect against disruptions. The implementation of these measures requires substantial financial expenses, but failure to act will result in a worldwide technological stagnation because of a Taiwan disruption. The various initiatives need diplomatic efforts to establish their fundamental link. The political willingness to work together becomes essential because geopolitical competition between nations threatens to destroy all implemented strategies.

The Taiwan question requires a new analysis which studies its economic and technological aspects instead of treating it as a standard geopolitical issue. All nations with advanced economies that depend on semiconductors need Taiwan to maintain its stability. The shared interests between these nations should drive them to create multiple international frameworks which will enhance their supply network stability and technological alliance development. The worldwide economic system encounters two major problems because TSMC maintains market dominance, which generates both national security risks and possibilities for worldwide partnership. The protection of collective action needs diplomatic efforts to create sustainable environments which produce enduring successful results.

The semiconductor industry of Taiwan has established the nation as an essential economic partner for worldwide business operations and technological progress of the future. The supply chain faces two major threats because of disruption risks and geopolitical conflicts, but organisations can reduce these risks through supply chain diversification, international cooperation and diplomatic efforts. The stability of Taiwan requires protection because it enables modern economic systems to function and supports the advancement of future technological developments. The Taiwan question surpasses state sovereignty because it determines the future of global innovative capabilities.

The opinions expressed in this article are his own.

References

• Chang, Y.-H. (2025). Strategic silicon: Geopolitics is redirecting semiconductor investment. IDTechEx Research Article. https://www.idtechex.com/en/research-article/strategic-silicon-geopolitics-is-redirecting-semiconductor-investment/33412 
• U.S.–Taiwan sign trade deal cutting tariffs and expanding semiconductor investment. (2026, January 15). AP News. https://apnews.com/article/95de4082d5e36a3c0a0b00f613a5df39