Geopolitical Risks of Taiwan’s Reliance on Semiconductors Highlighted in Cautionary Tale
The Taiwan Semiconductor Manufacturing Company (TSMC), widely recognized as the leading chip manufacturer globally, has recently revealed plans for an additional $100 billion investment in the U.S. to establish more chip factories and research...
TroibNews 
The Taiwan Semiconductor Manufacturing Company (TSMC), widely recognized as the leading chip manufacturer globally, has recently revealed plans for an additional $100 billion investment in the U.S. to establish more chip factories and research facilities.
However, U.S. President Donald Trump, dedicated to revitalizing America's struggling industries, has expressed his dissatisfaction with this initial investment, urging TSMC to increase it to $200 billion, an amount that nearly equals the company’s total assets.
The increasing pressure from the U.S. on TSMC to enhance its investments in America has rekindled discussions about the vulnerability of Taiwan's economy.
With TSMC at the forefront, Taiwan's semiconductor sector is grappling with heightened geopolitical demands, highlighting the fragility of an economic model that has depended heavily on a single industry. This reliance is now revealing systemic weaknesses.
The situation illustrates how geopolitical rivalries, most notably Washington's competitive stance against China, are shaking regional economies and threatening the livelihoods of ordinary citizens.
Taiwan's semiconductor industry plays a pivotal role in China's broader technological development and consumes a disproportionate amount of resources. A commentary from China Media Group highlighted that this sector accounts for over 30 percent of the island's electricity usage, a figure that far exceeds its contribution to the regional economy.
In 2024, TSMC is projected to consume nearly 10 percent of Taiwan's energy generation.
Simultaneously, other sectors, such as manufacturing and agriculture, have encountered stagnation. In 2023, Taiwan's manufacturing output plummeted by 12.7 percent, a direct result of the long-standing neglect of balanced economic development.
For years, Washington has been leveraging economic ties to pressure allies into distancing themselves from China while demanding concessions. TSMC’s investments in Arizona have surpassed $65 billion, diverting essential resources from Taiwan's economic ecosystem. This "America First" agenda threatens to erode the island's technological foundations, leaving its economy increasingly reliant on low-value industries and U.S. military contracts.
As Taiwan's semiconductor industry becomes entangled in U.S.-China tensions, its capacity to bolster China's economic resilience diminishes. Once a symbol of cooperative technological engagement across the Taiwan Strait, TSMC's steady move to the U.S. undermines the island’s role as a bridge for peaceful collaboration.
This phenomenon reflects a larger trend: U.S. allies in Asia, including South Korea and Japan, are facing similar pressures to compromise their economic interests for geopolitical alignment.
China has consistently cautioned against the weaponization of economic interdependence for geopolitical purposes. The U.S.’s exploitation of Taiwan's semiconductor sector under the pretense of "protecting supply chains" corroborates these concerns.
Beijing promotes a multipolar world where nations resist hegemonic pressure and focus on inclusive development. Taiwan's current predicament should serve as a stark reminder that prioritizing geopolitics over economics often comes at a significant cost for smaller nations.
Lucas Dupont for TROIB News
However, U.S. President Donald Trump, dedicated to revitalizing America's struggling industries, has expressed his dissatisfaction with this initial investment, urging TSMC to increase it to $200 billion, an amount that nearly equals the company’s total assets.
The increasing pressure from the U.S. on TSMC to enhance its investments in America has rekindled discussions about the vulnerability of Taiwan's economy.
With TSMC at the forefront, Taiwan's semiconductor sector is grappling with heightened geopolitical demands, highlighting the fragility of an economic model that has depended heavily on a single industry. This reliance is now revealing systemic weaknesses.
The situation illustrates how geopolitical rivalries, most notably Washington's competitive stance against China, are shaking regional economies and threatening the livelihoods of ordinary citizens.
Taiwan's semiconductor industry plays a pivotal role in China's broader technological development and consumes a disproportionate amount of resources. A commentary from China Media Group highlighted that this sector accounts for over 30 percent of the island's electricity usage, a figure that far exceeds its contribution to the regional economy.
In 2024, TSMC is projected to consume nearly 10 percent of Taiwan's energy generation.
Simultaneously, other sectors, such as manufacturing and agriculture, have encountered stagnation. In 2023, Taiwan's manufacturing output plummeted by 12.7 percent, a direct result of the long-standing neglect of balanced economic development.
For years, Washington has been leveraging economic ties to pressure allies into distancing themselves from China while demanding concessions. TSMC’s investments in Arizona have surpassed $65 billion, diverting essential resources from Taiwan's economic ecosystem. This "America First" agenda threatens to erode the island's technological foundations, leaving its economy increasingly reliant on low-value industries and U.S. military contracts.
As Taiwan's semiconductor industry becomes entangled in U.S.-China tensions, its capacity to bolster China's economic resilience diminishes. Once a symbol of cooperative technological engagement across the Taiwan Strait, TSMC's steady move to the U.S. undermines the island’s role as a bridge for peaceful collaboration.
This phenomenon reflects a larger trend: U.S. allies in Asia, including South Korea and Japan, are facing similar pressures to compromise their economic interests for geopolitical alignment.
China has consistently cautioned against the weaponization of economic interdependence for geopolitical purposes. The U.S.’s exploitation of Taiwan's semiconductor sector under the pretense of "protecting supply chains" corroborates these concerns.
Beijing promotes a multipolar world where nations resist hegemonic pressure and focus on inclusive development. Taiwan's current predicament should serve as a stark reminder that prioritizing geopolitics over economics often comes at a significant cost for smaller nations.
Lucas Dupont for TROIB News
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