OPINION:
Western complacency about Taiwan risks a catastrophe that can still be prevented. Ukraine taught democracies a painful lesson: Modest investments in deterrence are cheaper than responding to a crisis.
Yet the West seems willing to relearn that lesson in the Taiwan Strait, where the stakes are higher. Only those who fail to grasp what the modern economy runs on can afford to treat Taiwan as a distant security problem.
A war or blockade in Taiwan would not remain an Asian crisis. It would arrive as a domestic emergency across the democratic world: on factory floors, in hospitals, data centers, military depots and financial markets. A crisis in a distant strait would become a crisis on the high street.
Governments would have to explain why an island that voters rarely think about suddenly shapes the prices of everyday goods, critical services and national defense.
The deeper cost is political. Investing now saves money, but more important, it spares democracies from discovering what they are truly willing to pay for their values. A Chinese blockade would test whether the West still believes freedom is worth defending when the bill is large, immediate and visible.
The scale of dependence is hard to overstate. U.S.-based semiconductor firms account for 50.4% of the global chip market share, yet the United States fabricates only about 10% of global chip capacity and thus remains heavily dependent on Taiwan for the most advanced semiconductors.
Taiwan alone produces 92% of the world’s leading-edge chips. That is a concentration risk embedded in the operating system of the global economy.
This is why the economic estimates are stark. One severe-war model estimates that a U.S.-China war over Taiwan could inflict a first-year hit of about $10.6 trillion on the world economy, roughly 9.6% of global GDP — far exceeding the 3.1% global contraction during COVID-19 in 2020 and the roughly 4% contraction associated with the global financial crisis.
This would be a depression-scale event for the digital age.
The damage would extend beyond output tables. Europe would feel it in the automotive and industrial manufacturing sectors. East Asia would feel it across memory, chemicals, tools and shipping. American consumers would feel it in delayed car deliveries, higher electronics prices, thinner inventories and production stoppages in items such as telecom equipment and industrial machinery.
Taiwan-made chips now sit inside almost everything that makes advanced life feel stable.
That includes medicine. Federal semiconductor and health security warnings have noted that chips are embedded in medical products such as pacemakers, and that electronics shortages create vulnerabilities across critical medical-device supply chains.
Imaging devices, monitors, testing systems and other essential equipment all depend on components that remain invisible until unavailable. In a prolonged crisis, hospital resilience would weaken as public anxiety and medical demand rose.
The parent waiting for a child’s asthma device would understand Taiwan’s importance faster than any white paper. So would the small-business owner watching inventories vanish.
The national security consequences are equally direct. National Security Strategy semiconductor findings describe chips as essential to modern defense systems, including radar, communications, electronic warfare, cybersecurity, missiles, drones and sophisticated aircraft.
The Government Accountability Office has warned of persistent F-35 supply chain and sustainment problems. A severe disruption would do more than slow procurement. It could impair maintenance, upgrades and readiness across platforms that depend on trusted replacement electronics.
Then there is artificial intelligence. U.S. officials have been explicit that advanced packaging is essential to the semiconductors driving AI. The Commerce Department has warned that 2.5D packaging is foundational to GPUs and other AI chips, and inadequate packaging capacity has become a chokepoint for generative AI demand.
Taiwan’s foundry ecosystem shows why that matters: Advanced chips depend on integrated packaging, close collaboration with memory and materials suppliers and manufacturing excellence that cannot be re-created overnight. Remove that support, and much of the world’s most advanced hardware risks becoming dead silicon — technically impressive but strategically useless.
This is why the gravest danger is not just financial. A Chinese blockade would create a silicon hostage crisis, forcing democracies to choose between prosperity and principle, between safeguarding supply chains and defending a free society’s right to determine its own future.
The test would be immediate, expensive and impossible to hide from voters.
Failure would shatter more than Taiwan. It would tell allies and adversaries alike that democratic commitments are conditional and that coercion works.
So the question confronting the West now is simple: Do we believe people deserve self-government only when defending it is inexpensive?
The time to strengthen deterrence is now because prevention is cheaper and complacency guarantees that, under the worst circumstances, we will discover the true price of our values.
• Rt. Hon. Sir Gavin Williamson CBE MP is a member of Parliament in the House of Commons, former British secretary of state for defense, and guest lecturer at the School of Banking and Finance, National Sun Yat-sen University in Taiwan. Orina Chang is chair, professor and associate dean of the School of Banking and Finance at National Sun Yat-sen University in Taiwan.
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