In the face of an ever-rising threat from a revanchist China, Taiwan has sought to leverage its central position in the world’s semiconductor supply chains to shore up support from friendly countries. Taiwan produces more than 90% of the world’s most advanced microchips and 60% of semiconductors overall.
Semiconductors have become known as the "new oil," powering everything from smartphones and bank ATMs to automobiles and military systems. For that reason, a disruption of Taiwan’s semiconductor production would have far-reaching ripple effects on the global economy.
Though U.S. pressure prodded Taiwan Semiconductor Manufacturing to build a $40 billion production facility in Arizona, since first announcing the project in May 2020 the world’s largest contract chipmaker has made a strategic decision to go global with expansions to both Japan and Germany.
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