Even in the face of economic and diplomatic coercion, Taiwan is unlikely to relinquish its democratic system. Yet US efforts to promote domestic semiconductor manufacturing — reflected in the US$280 billion CHIPS and Science Act — threatens to undermine the long-term competitiveness of Taiwan Semiconductor Manufacturing Co (TSMC), severely threatening the nation’s “silicon shield.”The US semiconductor manufacturing push has inspired nervousness in Taiwan. As US Secretary of Commerce Gina Raimondo said last year: “America buys 70 percent of its most sophisticated chips from Taiwan... [That is] downright scary and untenable.”Drumming up fears that Taiwan is in danger undercuts business confidence and could undermine Taiwan’s economic prosperity and hurt global chip production. Chinese Communist Party leaders have long asserted China’s sovereignty over Taiwan and insisted that unification is inevitable. Dropping the facade, ostensibly in support of Taiwan, would make the nation’s geopolitical position even more tenuous.
