Why a tiny chip in your phone could spark a US-China clash over Taiwan
If China invades Taiwan, Washington is expected to be its most committed defender. But why would a Western power risk conflict over a small, self-governed island nearly 7,000 miles away? The answer sits inside nearly every smartphone, car, and missile system: semiconductors.
Semiconductors are Taiwan’s biggest edge in terms of economics and geopolitics. The island is home to the Taiwan Semiconductor Manufacturing Company (TSMC), which produces the vast majority of the world’s most advanced semiconductors.
“These chips are being used by the US commercially and in the military,” Manny Mogato, a veteran defence journalist from the Philippines, told Global South World. “If China invades Taiwan, America will lose its main source of semiconductors.”
Semiconductors are tiny but essential components in nearly everything modern — from smartphones, cars, and even military equipment like fighter jets and ballistic defence missile systems.
Taiwan accounts for roughly 90% of the world’s cutting-edge chip production, earning it the nickname “Silicon Island,” a nod to California’s Silicon Valley. Approximately 44.2% of US logic chip imports come from Taiwan, and TSMC alone supplies key components to Apple, Nvidia, and countless other tech giants.
The global dependence is so acute that, according to the Council on Foreign Relations, no company could replace Taiwan’s output in the short term if production were disrupted.
While China has historically been Taiwan’s biggest export market, the trade balance began to shift in 2024 when the self-ruled island, claimed by the People’s Republic of China as its renegade province, sold more goods to Washington than Beijing.
In February, Taiwan’s exports to the US surged 65.6% from a year earlier to $11.77 billion, driven largely by demand for chips and artificial intelligence technologies.
“That‘s the strategic implication. That's how important Taiwan is to America. Because if China gets a hold of Taiwan, it can block the export of semiconductors to America,” Mogato, a former Reuters correspondent, said.
What does US President Donald Trump feel about Taiwan’s global chip dominance?
Trump once accused Taiwan of undermining America’s chip industry. But his tone shifted earlier this year after TSMC pledged a $100 billion investment in the US, including five new fabrication plants.
In return, Washington is doubling down on military support. Trump’s second administration is expected to approve arms sales to Taiwan exceeding both his first-term total of $18.3 billion and President Biden’s $8.4 billion.
Even without formal diplomatic ties, the economic and strategic partnership between Washington and Taipei is clear. Taiwan’s chips are too important — and too irreplaceable — for the US to let them fall into China’s hands.
This story is written and edited by the Global South World team, you can contact us here.
