Security and Semiconductors: The Taiwan Question

Kaiya Davis

Introduction

Since 2020, China has been gradually increasing the number of military displays and strategic maneuvers that test the defenses of Taiwan and American commitments near the South China Sea. Backed by the United States, Taiwan capitalizes on its semiconductor dominance as a counterpoint to increase economic relationships and push for its inclusion in international platforms, such as the Asia-Pacific Economic Cooperation (APEC), in the face of these threats. Even less uniform, however, is the support from the White House, as Taiwan finds itself increasingly stuck in this risky situation. Although the United States has given Taiwan diplomatic backing, represented by support for Taiwan to enter APEC and other international organizations, no clear military guarantee has emerged. The situation leaves Taiwan in a precarious position with cryptic support. 

Background on the International Context of Taiwan

In 2021, China increased its military presence, escalating the pressure on Taiwan with frequent incursions into Taiwan's airspace and testing the island's defenses and the U.S. commitment in the region. By 2022, these actions evolved into near-encirclement drills that showcased coordinated capabilities across air, sea, and cyber domains, raising stakes for Taiwan and the region. In turn, Taiwan now focuses on using its economic and technological abilities to bolster its standing on the international stage as well as maintain its relevance to its supporting allies. The semiconductor industry is critical to global supply chains and even more essential to the United States, which has allowed tech companies to become a diplomatic tool, exemplified by Taiwan's U.S.-backed bid to join APEC. Against these economic and diplomatic moves, Taiwan has various vulnerabilities. U.S. defense funding and military cooperation have been increasingly flaky since the start of the Trump Administration, with Trump pulling 400 million in defense aid funds after the military parade in Beijing. The current economic health and policies of the United States have also restricted high-end weaponry and the ability for the Taiwanese defense capability to expand under U.S. support. American policy analysts are warning of the dangers of reliance on third-party security guarantees, as China continues to modernize its military and has clearly shown its ability to act decisively when provoked. 

The cross-strait tension is rooted in decades of unsolved political issues, such as China's insistence that Taiwan is a part of its territory and Taiwan's attempts to retain its independence. These disputes have repeatedly impacted surrounding regions, contributing to heightened naval activity in the East China Sea, air patrols by Japan, and strategic recalculations by Southeast Asian countries. Further, China's assertiveness in the South China Sea and the nine-dash line brings overlapping security concerns that pass well beyond Taiwan to threaten the freedom of navigation and regional stability.

U.S. Policy Under Trump

The U.S. remains Taiwan’s primary external support, given its strong diplomatic ties and verbal alliance, in addition to being the source and seller of weapons to Taiwan. Since 2020, Washington has publicly affirmed its commitment to the island, backing participation in international forums such as APEC and reinforcing Taiwan’s global relevance. However, these actions have created tension as China resists Taiwan’s inclusion and continues to challenge the United States at multilateral platforms, framing the U.S.’s stance with Taiwan as a provocation. At the same time, weapons delivery often lags behind China’s accelerating military expansion. His approach has focused on transactional agreements, which rely on leverage for negotiation and economic bargaining rather than on consistent military commitments. China monitors U.S. actions and looks for inconsistencies in military engagement as opportunities for coercion. The usual military movements of Beijing, incursions into airspace, and encirclement exercises show their capacity and readiness to use force, putting pressure on Taipei to equip for defense while engaging internationally. The existence of Taiwan increasingly depends on the island's ability to develop a plan of action that combines economic measures, diplomatic overtures, and gradual military preparedness to deter sovereignty claims in the wake of China's enhanced military might.

Taiwan’s Defense and Leverage

Taiwan has used its economic and technological power to manage cross-strait tensions, with its semiconductor sector becoming a shield and a bargaining chip at the same time. Taiwan, which produces most of the world's advanced chips, has great power over global supply chains; thus, its stability becomes necessary for the United States and the world. This economic power not only makes Taiwan's position more secure diplomatically but also opens up ways for easy participation in places like APEC through U.S. backing, which means wider recognition without stirring direct military confrontation. 

Taiwan's capacity to thwart attacks rests on its skillful balancing of economic power, diplomatic activity, and gradual military preparedness. U.S. strategic ambiguity, particularly now during Trump's presidency, means that Taiwan has to deal with possible dangers through a mixture of global trade and political influence, along with foresight, caution, and strength. Taiwan’s defense strategy is highly connected with its role in the global economy. By diversifying its investments and keeping up its technological edge, the island reduces its reliance on the mainland. Taiwan’s approach also signals its importance to the United States and other international players. Every diplomatic or trade action, from semiconductor agreements to APEC participation, acts as a deterrent against intimidation. It shows that Taiwan’s security depends on both economic ties and traditional military strength, which helps Taiwan increase its influence in its challenging environment.

Conclusion

Taiwan's security and its position in the world depend on a tricky mix of economic power, diplomatic recognition, and U.S. support, all of which are under the pressure of China. The island has used its leading position in semiconductor manufacturing to get a say in the world's technology supply chains and also to put forward its case for attending global conferences like APEC, where it tries to show that it exists on the world stage. Still, these economic and diplomatic advantages are not without drawbacks or weaknesses. Ultimately, U.S. policy under Trump places Taiwan in a situation where it must be very careful in making decisions. The island can use economic and diplomatic means to create deterrence, but the uncertainty of military aid makes Taipei act with a very careful strategy. It is not clear whether Trump's policies will favor Taiwan, China, or a middle ground based on transactions, thus leaving Taipei to juggle deterrence, diplomacy, and self-reliance in an unstable manner as it faces a determined and increasingly powerful neighbor.