Taiwan’s industry faces tighter controls, potentially shifting U.S. reliance on Taiwanese supply and prompting adjustments for global tech companies.

Historical and ongoing tensions include TSMC’s 2024 considerations to relocate fabs due to China threats and concerns about global dependence on Taiwan for critical chip supply used by major players.

Taiwan’s developed semiconductor ecosystem, built over decades, cannot be relocated, and the island will continue to grow its domestic capacity while expanding a more limited presence in the United States.

The United States has agreed to reduce tariffs on Taiwanese goods to 15% from 20% in exchange for increased Taiwanese investment in the U.S.

U.S. officials, including Commerce Secretary Gina Raimondo, have pushed for moving a significant portion of chip manufacturing to the United States, with targets such as a 40% share in leading-edge production and the possibility of tariffs if goals aren’t met.

Analysts warn of global ripple effects as supply chains are reevaluated in regions like the UK, Canada, and Australia, while opportunities arise for South Korea and Japan to expand their own semiconductor sectors.

The broader context shows geopolitical and economic stability concerns in global chip supply chains, underscoring the tension between diversification goals and Taiwan’s entrenched position.

Beijing’s claims over Taiwan and the concept of silicon shielding are discussed, highlighting strategic defense considerations and the risk to the global tech supply chain from any disruption.

The debate centers on diversifying supply chains versus preserving Taiwan’s robust ecosystem, balancing domestic expansion with international collaboration.

The global semiconductor supply chain remains highly concentrated with Taiwan at the center of wafer fabrication and packaging.

Analysts note replicating Taiwan’s production capacity is extremely challenging due to its integrated ecosystem, skilled workforce, and established supplier networks.

The story notes an imminent 2029 deadline, ongoing trade talks, and the broader policy clash between onshoring aims and Taiwan’s rooted manufacturing ecosystem.