Silicon Sovereignty: Taiwan, Technology, and the New Theater of Power
Few people realize how deeply the world’s most advanced technologies are tied to one small island in the Western Pacific. Taiwan produces over 60 percent of the world’s semiconductors and nearly 90 percent of advanced chips. These chips power artificial intelligence systems, defense platforms, and critical infrastructure. Whoever controls that supply chain controls the foundation of the modern economy.
China understands this better than most. Any move on Taiwan would not simply be about reclaiming territory. It would be about technological dominance. Control of Taiwan’s semiconductor output would give Beijing leverage over global manufacturing, communications networks, and even Western defense capabilities. In modern geopolitics, microchips have become the new oil.
The United States sees the same reality. Through the CHIPS and Science Act, direct investment in fabrication, and support for domestic semiconductor infrastructure, Washington is racing to secure technological independence. This includes taking equity stakes in private firms, subsidizing advanced production, and securing access to rare earth minerals that are essential for both semiconductors and advanced weapon systems.
What appears to be an industrial policy shift is, in truth, a form of strategic containment. For decades, economic efficiency drove globalization. Today, national security drives deglobalization. Dependence on offshore production, once considered an advantage, has become a serious vulnerability.
Trump Reacts: Escalation in Real Time
In recent days, the geopolitical tension has turned from latent to open. In response to China’s move to tighten export controls on rare earth elements, particularly those with defense or dual-use applications, President Trump announced plans to impose new tariffs.
He stated that the United States will apply 100 percent tariffs on Chinese imports beginning November 1 and that additional export restrictions on critical software are under review. He also questioned whether an upcoming meeting with President Xi Jinping should continue, citing what he described as a “hostile” posture from Beijing.
This is more than a policy reaction. It is confirmation of what has been building for years: technology, supply chains, and geopolitics are now fully intertwined. The United States is signaling that it views China’s export policies as an act of economic warfare.
The transition now underway marks the early stages of a global restructuring of power. The next decade will not be defined by who grows the fastest but by who controls the inputs that make growth possible. Semiconductors, lithium, cobalt, and rare earth minerals are now geopolitical assets. Their distribution will determine the balance of power for decades to come.
The contest over Taiwan is not only a regional dispute waiting to unfold. It represents the front line of a systemic realignment between economic models and security priorities. The West is no longer competing solely on innovation; it is competing on control.
For investors and policymakers, understanding this shift is critical. Supply chains are becoming statecraft. Technology is becoming territory. The frontier of power is being redrawn, one nanometer at a time.
Sources
Semiconductor Industry Association and Boston Consulting Group (2023). The Semiconductor Supply Chain: Assessing National Security Risks.
RAND Corporation (2022). China–Taiwan and the Global Semiconductor Supply Chain.
U.S. Department of Commerce (2023). CHIPS and Science Act Overview.
Center for Strategic and International Studies (2022). The Geopolitics of Semiconductors.
U.S. Department of Defense (2023). Critical Minerals Strategy.
Reuters (2025, October 9). China Tightens Rare Earth Export Controls.
Politico (2025, October 10). Trump Threatens to Reignite Trade War Over Rare Earths.
Financial Times (2025, October 9). China Unveils Sweeping Rare-Earth Export Controls to Protect National Security.
