Taiwan's Dominance in Semiconductors and Supply Chain Risks

Taiwan plays a crucial role in the global semiconductor industry, with about half of all semiconductors and more than 90% of the most advanced chips being manufactured there. The disruption of Taiwan's semiconductor supply chain would have severe consequences for the global economy. Potential disruptions include a blockade by China or an invasion of Taiwan. China's preparations for these scenarios, along with its strong desire to reunify Taiwan, make these risks significant. To mitigate these risks, the United States is encouraging the building of semiconductor plants domestically, but this alone cannot fully protect against economic fallout. Strengthening the entire semiconductor industry and developing a collective supply chain security strategy with allies are also crucial.