Taiwan chip supply risks that Silicon Valley has largely ignored

Federal officials warned technology leaders that heavy reliance on Taiwan for advanced chips creates a major economic vulnerability, and governments plus some companies have announced investments to expand U.S. production that will take years to change global supply patterns.

U.S. officials and intelligence leaders have repeatedly briefed technology executives about the risks of relying on Taiwan for advanced semiconductor manufacturing. Taiwan produces the large majority of high-end chips used in phones, data centers and artificial intelligence, and those chips are central to many global industries. The Biden and Trump administrations have used subsidies, tariffs and classified briefings to try to shift production to the United States. Some firms and Taiwan Semiconductor Manufacturing Company have made multi‑billion dollar commitments to U.S. factories, but experts say those investments will take years to affect global supplies. What is known: - Officials held classified briefings and warned that a blockade or conflict involving Taiwan could sharply disrupt chip supplies. - Reporting and industry estimates show Taiwan supplies roughly 90 percent of the world's most advanced chips, making it a concentrated point of dependence. - The U.S. government enacted the CHIPS Act, offered subsidies and used tariff threats; some companies have since pledged or made investments in U.S. chip plants. - Even with new U.S. plants, several production steps such as advanced packaging still depend on facilities in Taiwan, so full supply resilience is not yet established. Summary: The concentration of advanced chip manufacturing in Taiwan remains a central supply‑chain vulnerability and reported investments and policy actions will take years to materially change that balance. Undetermined at this time.