A recent Reuters report details the reasons behind the growing tensions between China and Taiwan.
Earlier this year, President Joe Biden affirmed that the U.S. armed forces are prepared to take action to defend Taiwan if China invades.
“That’s the commitment we made,” Biden said in response to a question over the U.S. intention to protect Taiwan. “We agree with the ‘One China’ policy. We signed on to it.”
The White House quickly reiterated the administration’s stance regarding the matter, clarifying that the president’s statement does not suggest a policy shift, but rather reflects concerns over the negative effects of China’s interests in Taiwan following Russia’s invasion of Ukraine.
According to a statement the Brookings Institution’s Michael O’Hanlon provided in a CNBC report, the statement contradicts the U.S. long-term “strategic ambiguity” toward Taiwan, which creates doubt about the possibility of coming to Taiwan’s defense if China were to invade.
Any potential military action imposed upon the Chinese could result in global supply chain delays.
“Taiwan has positioned itself as the go-to supplier of the semiconductors found in thousands of electronics, from the iPhone to crucial military equipment,” the CNBC report explains. “But the global reliance on Taiwan for the essential chips has come under increased scrutiny amid a global shortage.”
According to data released by TrendForce, Taiwan’s chip foundry contribution makes up 64% of the total market. Specifically, Taiwan Semiconductor Manufacturing Co. accounted for 53% of total foundry revenue last year, the report states.
“I think for older generations, they may remember a Taiwan that produced cheap toys,” said Rupert Hammond-Chambers, president of the US-Taiwan Business Council, in an interview with CNBC. “That, however, has really shifted.”