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🔵The Vice President of the Trump administration, Vance, recently explained that if mainland China reclaims Taiwan, the U.S. could face serious economic disruption. His key point: the U.S. isn’t just worried about territory—it’s worried about high-tech supply chains, particularly TSMC, the world’s most advanced semiconductor manufacturer.

🔹 Missiles and Chips: Two Sides of the Same Net
Military: Patriot missiles deployed to “protect” Taiwan, but effectively turn it into a frontline outpost, raising defense spending and tying the island’s security to U.S. military strategy.
Economy: TSMC controls critical chip production for smartphones, AI, automotive, and defense systems. U.S. dependence on TSMC makes Taiwan a strategic economic leverage point.
Together, these form a single interdependent net, binding Taiwan militarily and economically to U.S. interests.
🔹 The Chip Crisis
U.S. domestic chip manufacturing has shrunk from 37% → 12% of global production
Taiwan alone accounts for 22% of global chip capacity, much of it cutting-edge (5nm, 3nm)
Even U.S. firms with 47% global chip sales manufacture 88% overseas, largely relying on TSMC
🔹 Attempts at Control
Subsidies (CHIPS Act) and forced TSMC relocations to the U.S. face structural bottlenecks:
Lack of skilled labor
Long construction timelines (3+ years per fab)
Higher costs (30–50% more than Taiwan)
Taiwan’s economy is deeply tied to TSMC: 20% of GDP, 40% of exports, 10% of power consumption
The strategy extracts both economic “protection fees” (through forced investment in U.S. fabs) and military protection payments (through weapons purchases).
🔹 Strategic Weaknesses Exposed
Even if TSMC builds in the U.S., core technologies and supply chains remain in Taiwan/Asia
China’s domestic chip production is rapidly growing and may reach 24% of global output soon
U.S. attempts to dominate Taiwan expose structural vulnerability rather than strength
💡 Key Insight
Vance’s statement demonstrates the fragility of U.S. hegemony:
Military and economic levers are interwoven but unsustainable
Dependency on foreign technology undermines claimed strategic dominance
Taiwan and TSMC cannot be treated as permanent “hostages” without risking U.S. industrial collapse

🚨Bottom line:
Missiles and chips may look like a strong strategic net—but reality shows it is fragile. The U.S. is over-leveraging Taiwan to compensate for its own industrial shortfalls, and this miscalculation could have long-term geopolitical and economic consequences.
👉DYOR | NFA
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