OPINION:
America has long projected power through warships, alliances, economic statecraft and the strength of our ideals. But in the 21st century, America’s continued leadership rests just as heavily upon access to technology — especially the world’s most advanced computer chips — and the strategic resources that undergird them.
Beijing already holds enormous leverage over the supply chains of rare earth minerals, which are essential for the manufacture of the computing hardware that powers the information economy. According to the U.S. Geological Survey, China supplied 71% of U.S. imports of rare earth compounds and metals between 2021 and 2024 and 67% in 2025. Overall, China produced 270,000 of the world’s 390,000 tons of rare earths supply last year. Beijing has shown a clear willingness to use rare earth minerals as geopolitical leverage, including the recent tightening of export controls against the United States, Japan and other countries.
What partly offsets China’s rare earths advantage is America’s technological counterweight: advanced semiconductors. And Taiwan is the fulcrum of that counterweight.
Taiwan holds roughly 92% of the world’s most advanced semiconductor manufacturing capacity. TSMC alone controls more than two-thirds of global contract chip manufacturing. The American vulnerability is equally pronounced: U.S.-based firms capture about 50.4% of global chip revenue but only fabricate about 10% of global chip supply. American and Taiwanese firms cooperate closely to design and power much of the digital future.
If Taiwan fell into Beijing’s hands, the CCP would monopolize both ends of the world supply of computing hardware: the minerals that go into advanced systems and the chips that make them intelligent.
Washington would face profound strategic, national security and economic consequences. Taiwan is an irreplaceable chokepoint for advanced nodes, packaging, AI accelerators and the firmware support that makes high-end chips usable. If Beijing controlled that ecosystem, the United States would not merely face a supply shock. It would face a world in which China held veto power over the processors needed for artificial intelligence, cloud computing, advanced weapons, telecom networks and the next generation of industrial productivity.
Americans would feel pain across the board. Taiwan-made chips sit inside iPhones, laptops, cars, tractors, cell towers, data centers, medical devices and modern defense systems. Pacemakers, imaging machines, hospital monitors, F-35s, drones, radar systems and advanced communications all depend on sophisticated semiconductors. If Taiwan’s chip ecosystem moved into China’s orbit, America would face higher prices, thinner inventories, weaker hospital resilience and lower military readiness simultaneously.
Then comes the economic shock caused by the loss of the world’s single most important manufacturing hub. One model estimates that severe disruption to Taiwan’s semiconductor industry, due to a blockade or war, could slash global GDP by 9.6% in the first year. The United States alone could face an estimated $2.5 trillion loss to our economy. Europe would be hit in autos and industrial manufacturing; Japan in equipment and specialty chemicals; South Korea in memory and materials; and America across AI, cloud computing, consumer electronics, defense and health care. This would not be a normal recession. It would be a digital-age depression.
That is why Taiwan’s domestic politics matter as much as its military defenses. China does not need to rely only on missiles, ships and aircraft. Beijing is testing a political route to control Taiwan. It is using Taiwan’s democratic openness as a weapon against Taiwan itself.
Since the 2024 election, President Lai Ching-te’s Democratic Progressive Party has governed without a legislative majority. Taiwan’s Legislative Yuan is divided between forces that see the nation’s future as tied to the United States and a worldwide alliance of democracies, and forces that favor a softer line toward Beijing. That division is not merely procedural. When opposition forces freeze defense spending, obstruct security cooperation or create legislative paralysis, they give Beijing exactly what it wants: a weaker Taiwan, a divided Taiwan and eventually a Taiwan easier to absorb.
China is exploiting that divide relentlessly. Taiwan’s National Security Bureau has warned that Chinese cyberattacks averaged 2.8 million a day in 2025, while more than 10,000 suspicious accounts pushed over 1.5 million misleading messages designed to promote pro-China narratives and sow distrust in the United States. This is not ordinary political competition. It is interference by a totalitarian regime, the weaponization of democracy against itself.
The danger is clear. If Beijing-friendly forces gained decisive control of Taiwan’s central institutions, China would not need an amphibious invasion to achieve many of its objectives. Taiwan could be handed over politically before it was ever conquered militarily. The result would be the same strategic disaster: China would control Taiwan’s chips, weaken America’s leverage over rare earths, fracture the First Island Chain and prove that aggression works.
If Taiwan’s future is decided by Chinese coercion — whether through invasion, blockade, cyberwarfare or political capture — America would lose a strategic counterweight, the free world would lose a pillar of the modern economy and democracy would suffer one of its most consequential defeats.
• Orina Chang is an entrepreneur, educator and investor. She 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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