Geopolitical tensions test Taiwan’s chips industry

Significance

China's claim to Taiwan as a province destined for reunification, coupled with the growing geopolitical rivalry between Beijing and Washington, makes the island a significant vulnerability in the global semiconductor supply chain and, thus, a potential point of failure for the global economy.

Impacts

• Regardless of Trump questioning US commitment to Taiwan, most likely senior advisers in his administration would be strongly pro-Taiwan.
• Taiwan's chip industry faces non-geopolitical challenges such as water scarcity, energy supply and land availability.
• Onshoring of chip fabrication will still leave geopolitical risks around supplies of raw materials and chemicals.