In May, President Joe Biden issued a stark warning to China that the US would defend Taiwan militarily if China invaded.
“That’s the commitment we made,” Biden responded to a question about US intentions to protect Taiwan. “We agree to the ‘One China’ policy. We have joined it.”
Although the White House was quick to confirm that the president’s comments did not reflect a change in policy, his comments came at a time of heightened concerns about China’s interest in invading Taiwan following Russia’s invasion of Ukraine.
Biden’s warning contrasted with the longstanding US position of “strategic ambiguity” when it comes to Taiwan. This policy makes it unclear whether the US would come to the aid of Taiwan if China were to invade, Michael O’Hanlon of the Brookings Institution said in an interview with CNBC.
Any potential action could impact the global supply chain. Taiwan has positioned itself as the first-choice supplier of semiconductors found in thousands of electronic devices, from the iPhone to critical military equipment. But the world’s reliance on Taiwan for essential chips has come under increasing scrutiny amid a global shortage.
According to data from TrendForce, Taiwan accounts for 64% of the total chip foundry market. According to TrendForce, Taiwan Semiconductor Manufacturing Company, or TSMC, accounted for 53% of total foundry sales in 2021.
“I think older generations might remember a Taiwan that produced cheap toys,” Rupert Hammond-Chambers, president of the US-Taiwan Business Council, said in an interview with CNBC. “But that has really shifted.”
Watch the video above to learn more about why tensions between China and Taiwan are rising, the importance of Taiwan in the global supply chain, and what experts might expect from China’s increased aggression against its neighboring island.