The US is actively working to shift its semiconductor supply chain away from Taiwan, aiming for greater security and independence. This move raises questions about global tech stability, geopolitical tensions, and the future of chip manufacturing. Below, we explore the reasons behind this shift, the risks involved, and what it means for the global economy.
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Why is the US trying to reduce reliance on Taiwan for chips?
The US aims to strengthen its domestic semiconductor industry and reduce dependency on Taiwan, which currently produces about 95% of the world's advanced chips. Concerns over geopolitical tensions, especially with China, and supply chain vulnerabilities have prompted efforts to bring manufacturing home and diversify sources.
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What are the risks of shifting semiconductor supply chains?
Moving supply chains can lead to delays, increased costs, and technical challenges. It may take decades to fully establish new manufacturing hubs, and there’s a risk of disrupting global markets if supply cannot meet demand during the transition.
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How might this shift affect global tech and trade?
A shift could reshape global trade relationships, with countries like South Africa and African nations seeking new trade agreements. It could also lead to increased competition among nations for semiconductor dominance, impacting prices and innovation worldwide.
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What role does China play in this chip supply story?
China is a key player because of its own ambitions to develop a self-sufficient tech industry. Tensions between the US and China, along with China's claims over Taiwan, add complexity to the supply chain shift, making geopolitical stability a critical factor.
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How long will it take for the US to become independent from Taiwan?
Experts estimate that achieving full supply chain independence could take 10 to 20 years, given the scale of the challenge and the need for significant investment, talent development, and infrastructure building.
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What is Taiwan doing to maintain its role in chip manufacturing?
Taiwan’s TSMC is investing heavily in new facilities and security measures to protect its market share. The country remains a critical hub for advanced chip production, and its strategic importance continues to influence global tech politics.