US-China and Taiwan Relations

Growth in technology has brought with it a new invention: the semiconductor. After rapidly becoming one of the most sought-after products in the world, it is no wonder that both the U.S. and China have begun what is essentially a new cold war over who can be first to monopolize this technology. Semiconductors are tiny little chips that power almost all electrical devices, their extraordinary ability allowing them to power refrigerators, phones, laptops, and even car navigation systems. Through the growing demand for faster and more efficient technology, semiconductors have been able to reach the forefront of advancements, ultimately making them one of the most sought after commodities globally. However, due to their high value and the locations of production, the hunt for semiconductors has exacerbated tensions between the United States and China; both nations hope to assert dominance over this crucial industry, which in turn plays a vital role in shaping the world’s economy and international relationships. 

First, let’s explain what a semiconductor is. This chip, containing elements like silicon, gallium nitride, and indium, possesses the unique ability to conduct electricity in certain circumstances and are paramount in wireless communication. However, what makes them so special is that they are the building blocks for all modern electronics. Take a smartphone as an example. As of 2023, it is estimated that 6.7 billion people around the globe own smartphones, and these devices are all dependent on semiconductors. All major characteristics of a smartphone, ranging from CPUs, GPUs, and power management systems are powered by a semiconductor, essentially meaning that this component has control over all data-processing, launching apps, running complex algorithms, and controlling visual displays. With its exceptional abilities, it is no wonder numerous countries place importance on controlling its production and the materials necessary to make it; it’s not an exaggeration to say the entire electronic world depends on it. 

Semiconductors play an immense role in shaping today’s geopolitical landscape; its impact is not just limited to the technological side of life. The importance of semiconductors ranges to nearly every area of society, impacting relations between countries and exacerbating tensions. Currently, both the US and China have put semiconductors at the top of their priorities, with Chinese president Xi Jin Ping pointing towards a future that would largely revolve around the implementation of these advanced chips. This future, which is military-focused, depicts a world where the Chinese military has unparalleled technology through AI and invests heavily in semiconductor production and acquisition. Historically, China has been extremely reliant on US-manufactured semiconductors, but, in recent years, the Chinese government has plunged billions of dollars into producing their own semiconductor technology, and though they are estimated to be 10 years behind the global semiconductor industry, the likelihood that China is able to create their own advanced chip-making is almost certain. In response to these efforts, the United States has already implemented export controls, and has been able to convince their allies, like Japan and the Netherlands, to  effectively stop the flow of US and foreign-made semiconductors to China—with the only bypass being through a special US license. These restrictions on China's access have further soured relations between the two nations while also damaging domestic economies; Nvidia in the US faces revenue cuts, and both Hong Kong and China's year-on-year revenue dropped by 20% leading into February of 2023—all due to export controls placed on China. 

Taiwan stands at the forefront of these tensions. Taiwan, which produces over half of the world's advanced semiconductors, has become a priority for both the United States and China. China, which has laid claim to the island since 1949, may be motivated by the prospect of controlling Taiwan's semiconductor factories, effectively solving their chip-production issues in one go. However, it’s likely they would be unable to operate these production lines, as they run on US equipment. Furthermore, if Taiwan were to be controlled by China, the economic fallout would be severe, possibly resulting in a full breakdown of global markets. Experts in geopolitics and economics estimate that a war on Taiwan would cost the world as much as 10 trillion USD; this is inevitable when all major corporations—Apple, Nvidia and countless others—rely on semiconductors to manufacture their products. In recent years, China’s military intimidation has ramped up drastically, with a recent October 2024 incursion of 153 Chinese aircraft flying into Taiwanese airspace. This increased aggression against Taiwan has also prompted the US to take actions of their own, believing Taiwan to be crucial not only economically, but geographically as well. The US has repeated many times that it would act to defend Taiwan militarily if necessary. 

With semiconductors being one of the most valuable commodities in the world, we must acknowledge that interfering with the global semiconductor market will have drastic influences, and can bring about severe economic disasters. Large disruptions within places like Taiwan would almost certainly increase the risk of economic fallout. At present, we must do what we can to maintain the status quo, to calm tensions, and bring this conversation to the forefront of US politics. Semiconductors are here to stay, and we need answers that benefit not just these two superpowers, but the world at large. We must ensure that people, not militaries, access the benefits of semiconductors—for research, for communication, for building bonds between disparate communities across the globe.