“The one-China principle is the political foundation of China-US relations,” – Mao Ning, the Chinese Foreign Ministry spokesperson. 

While China has laid claim to Taiwan’s sovereignty ever since the end of the Chinese Civil War in 1949, the United States has kept informal relations and defense ties with the island through The Taiwan Relations Act, much to mainland China’s dismay. In recent years, China and the United States have gradually reached a standstill on the issue of arms sales to Taiwan, which has severely affected both the Sino-US and cross-Strait relations. On September 15, 2022, the United States Senate Foreign Relations committee approved a new bill named Taiwan Policy Act, which lodged substantial complaints from China. Aside from recognizing Taiwan as “a major non-NATO ally”, this movement by the United States also triggered a greater US-Taiwan tech supply chain partnership while preserving its military suppliance connections.

Taiwan’s strategic geopolitical values to the United States

How did a 14,000-square-mile island become the focal point of dispute between two of the world’s largest economic powers? According to Alfred Mahan’s Sea Power Theory, straits and ports wage major strategic values. They can improve the belonging nation’s naval combat power or disperse its maritime power. Taiwan’s geographical location and geopolitical values entitled it to possess such strategic values, both to China in terms of national security purposes and to the United States in terms of being a key puzzle piece to containing China’s resurgence efforts and global influence. 

In early 1949, the United States compiled an evaluation of Taiwan’s unparalleled strategic position, concluding that if the US-Soviet Cold War burst, control of Taiwan could cut off the Soviet Union’s presence in East Asia and Southeast Asia’s access to key materials. Today, the United States has established a triad of strategic goals to Taiwan – a security goal of constituting maritime obstacles for the Chinese military entering the Pacific Ocean, a political goal of attempting to influence Taiwanese people to grow fonder of democracy, and an economic goal of increasing Taiwan’s import and export dependence on the United States. 

USCT spoke with a U.S. native who spent over two decades in the U.S. military, another two decades in mainland China, and garnered extensive knowledge of industrial and technological policy concerns pertaining to the United States and China. The interviewee will be referred to the nickname of “Jerry” for the sake of confidentiality purposes and personal protection. Jerry was an expert military strategist and has spent considerable time working in the high-tech industry.

Jerry recalled Taiwan becoming a key link between modern competition of the United States and China, not so much for its economy, but rather its status as a growingly vibrant, unparalleled democracy. He mentioned that “while China regards Taiwan as a province and a part of the ‘arc of history’, the United States has taken strategic advantage of the Taiwan government’s embrace of self-identification and launched ongoing measures to establish American security guarantee.” Over the past few decades, the United States has sold weaponry and retained informal diplomatic ties with the island. Jerry reaffirmed that Taiwan’s prosperity in its chips only feeds the United States hunger, since chips define the technological future. 

“Right now, frankly, Taiwan has enough leverage to trigger a series of ‘Black swan incidents’ due to its geopolitical and technological importance to the United States and China,” Jerry adds. Taiwan’s security, political, and economic importance can be regarded as critical factors in order to break down the island’s geopolitical importance to the United States. In addition, an assessment of its concurrent role as a semiconductor powerhouse will be reviewed.

The security goal

When any country formulates national and international policy measures, geopolitical factors are always seen as of primary importance and a starting point for military influx. Former United States Secretary of State John Foster Dulles suggested the notion of “First Island Chain” in the 1950s, with the goal of encircling the Asian continent and forming a deterrent force to the subsiding nations. The Chain commences in the south of Japan’s Kyushu Island and extends south to Singapore. This artificial chain circumnavigates all of China’s coastline outlets. Taiwan, located in a strategic location of the Chain, acts as a defense outpost for the United States’ current strategic deployment in besieging China. 

“Once reunification occurs, China’s strategic defense line will be expanded outward from its southeast coast to the Pacific,” Jerry recalls. “It will have sufficient conditions to deploy a significant number of jets and surface ships to Taiwan’s east. If this occurs, China will control the oceans and sea channels to the southwest of the Japanese archipelago, and the first island chain meticulously constructed by the states [United States] will be dismantled.”

The political and economic game

The United States has historically viewed Taiwan as a strategic stronghold and a democratic paradigm for curbing China’s resurgence as a global influencer and for leveraging democratic influence across Asia. The United States has long considered Taiwan to be of high political value as a frontier in the ideological contest between the United States and China, as evidenced by the TRA and ensuing informal political backing. From encouraging Taiwan to develop in the direction of democratization and autonomy, Jerry recalled the United States’ activities being measures “so as to sustain a democratic regime that is Pro-US and anti-communist for a long time.”

“And you can tell from other occurrences, not just the arms sales from the act [TRA]. For example, remember the Summit for Democracy last December [2022]? The United States deliberately placed Taiwan on the list of participants,” Jerry said.

Internationally not recognized as a country nor as an international organization, Taiwan is ineligible to be invited to participate in the Summit for Democracy.  In order to reinforce the international democratic alliance, the United States took such initiatives to provide Taiwan a stronger international voice and an opportunity to demonstrate Taiwan-style democratization through international multilateral exchanges. “Taiwan has emerged as such an essential geopolitical icon for the United States that the states is continually finding opportunities to draw attention to Taiwan and other regional democratization trends in order to disseminate the pro-autonomy and pro-U.S. ‘free world’ philosophy,” Jerry adds.

Over the decades, the bipartisan United States government has been remarkably consistent in its attitudes and economic countermeasures against China. The United States’ long-term strategic goal of establishing industrial chains and economic development systems that exclude China has always revolved on the country’s national strategy regarding China. Taiwan is an excellent illustration. The US-Taiwan economic cooperation is being institutionalized, with the United States being the beneficiary and Taiwan responding fondly and eyeing to become a key link in the United States supply chain. Over the last two decades, the United States has made enormous profits from arms sales to Taiwan, supplying around $48.5 billion in arms to the island. Taiwan has evolved into the United States’ leading arms purchaser throughout the years, promoting the growth of United States military enterprises and economy. Furthermore, this sequel became an essential tool for the United States government to increase foreign exchange reserves and achieve international payment balance. On the military front, Jerry stated that “Taiwan has become the United States’ ‘dumping ground,’ absorbing the disposal of obsolete weapons and equipment.”

The rise of chips and Taiwan’s dominance 

Despite the United States’ triad of interlocking Taiwan tactics to stymie Chinese progress, arms sales through the TRA have been a mere microcosm of the larger geopolitical and economic priority the United States is placing in Taiwan now. With the onset of the internet era, semiconductors’ standing has evolved into a pivotal resource for many economies. The technological war is a potent asset for the United States to constrain China, as both nations have fully realized that semiconductors are closely tied to the future of national destiny. The emergence of Taiwan Semiconductor Manufacturing Company (TSMC) as a global semiconductor leader over the last few decades, along with the current global chip shortage, has accentuated Taiwan’s semiconductor industry’s importance in the global supply chain. TSMC is now the world’s largest and highest-quality chip manufacturer, generating more than half of the world’s chips. Currently, the United States lacks independent chip production power and relies on semiconductor fabrication units in Asia. The rapid development of the United States economy is inextricably intertwined with the support of Taiwan’s semiconductor manufacturing. Taiwan’s technology accomplishments ushered in equal if not greater strategic significance on the island than the previous economic and geopolitical reasons, as a foundation for United States’ economic, scientific, and technological headway.

Image credit to Al Jazeera Media Network

Image credit to Counterpoint Technology Market Research








USCT interviewed a veteran engineer who previously worked for Fairchild Semiconductor, one of the United States’ and the world ‘s most pioneering semiconductor manufacturers of transistors and of integrated circuits, to gain insight into Taiwan’s semiconductor centrality to the United States today. The interviewee will be referred to the nickname of “Ames” for the sake of secrecy and personal protection. 

Ames, who has been paying close attention to United States’ political-technological measures to Taiwan, noted that “the United States has already proceeded with another step in expanding linkages with Taiwan, which will further corroborate the Sino-US relationship. [United States House Speaker] Pelosi’s visit to Taiwan in August [2022] was more than just a show of United States’ muscle; she seized the opportunity to visit TSMC and persuade Taiwan to enhance chip collaboration with the United States.” This was true, considering Pelosi’s colleagues, including United States politicians Edward Markey, John Garamendi, Don Beyer, Alan Lowenthal, and Congresswoman Aumua Amata Coleman Radewagen, visited Taiwan shortly after with similar objectives.

Taiwan and TSMC may have given the United States a chance to resurface as the semiconductor behemoth it once was in the 1960s and 1970s. The construction of new manufacturing factories in Arizona by TSMC, as well as the exodus of over 1,300 TSMC senior engineers from Taiwan to Arizona in December 2022, exemplify the United States’ growing ambition to gain control of Taiwan’s technological frontier. The passage of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act in August 2022, which estimated US$53 billion in federal funding to provide loans, subsidies, and tax breaks to stimulate investment in United States semiconductor production, reveals the nation’s intention to boost domestic chip production. Taiwan has transcended its traditional role as the focal point of Sino-US geopolitical confrontation to become the ideal match to ignite the United States’ semiconductor blueprint for the twenty-first century. 

On the semiconductor front, the world will continue to witness growing connectivity between the United States and Taiwan. Meanwhile, as Taiwan’s technological impetus shifts, China’s lofty objective of chip self-sufficiency will be greeted with even more sumptuous uncertainty. The semiconductor dispute between the United States, China, and Taiwan have already altered the historic Sino-US geopolitical rivalry, and the future of their relationship will only become more deformed.