Continuing to browse our website indicates your consent to our use of cookies. For more information, see our Privacy policy.

Trade and technology

Power in a small package: Taiwan and the global semiconductor supply chain


Published 07 September 2021

Taiwan – producer of the world's most advanced microchips – is a "choke point" in US-China competition that threatens to upend complex semiconductor supply chains. To avoid further damage to an industry critical to post-Covid-19 economic recovery, the United States' approach to export restrictions must manage disruptions and minimize policy shocks.

Without significant promotional spending, Taiwan Semiconductor Manufacturing Corporation (TSMC) has gained global renown as the cutting edge of innovation. It is one of the most important parts of a highly integrated supply chain fabricating the world’s fourth most-traded category of goods, after crude and refined oil, and automobiles.

TSMC's success story has a geopolitical dimension. China's heavy reliance on Taiwanese semiconductors offer the island a defence against Beijing's increasingly truculent policies – at least for now. These trade links are becoming strained as US-China techno-nationalist imperatives put Taiwan’s place in the global technology ecosystem under unprecedented public pressure.

This paper by Jeremy Mark, Senior Fellow at the Atlantic Council's GeoEconomics Center, notes that Taiwan faces three key challenges: adapting a successful business model in a time of rapid change; using semiconductors to strengthen Taiwan’s place in the world; and realigning US-Taiwan interests as supply chains transform.

© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).


Author

Jeremy Mark

Jeremy Mark is Senior Fellow with the Atlantic Council’s GeoEconomics Center in Washington, DC. He previously worked for the International Monetary Fund and the Asian Wall Street Journal, including as Taipei bureau chief in the 1990s.

Articles by this expert

View bio

Have any feedback on this article?

contact us

BACK TO TOP