Wednesday, February 25, 2026- The global tech industry remains dangerously exposed to a single point of failure: Taiwan. The island produces the overwhelming majority of the world’s most advanced semiconductors, largely through manufacturing giant TSMC. From AI systems to smartphones and defense technology, Silicon Valley’s biggest players depend heavily on chips fabricated there — creating a supply chain risk that grows more urgent as geopolitical tensions rise.
Rising military pressure from China and increasing strategic competition with the United States have amplified fears of disruption. Even without direct conflict, blockades, cyberattacks, or political escalation could choke global chip supply within weeks. The pandemic-era semiconductor shortage offered a preview of how quickly production delays ripple through industries — from automakers to cloud computing providers.
While Washington has moved to incentivize domestic manufacturing and diversify supply chains, rebuilding advanced fabrication capacity takes years and tens of billions of dollars. For Silicon Valley, the warning signs are clear: reliance on a concentrated production hub is no longer just a business vulnerability — it is a strategic liability. Without accelerated diversification, the next chip crisis may not be a temporary shortage, but a systemic shock to the global technology economy.
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