Category Archives: United States

China, Economic, Taiwan, Technology, United States

Taiwan’s disintegrating £7.5tn secret weapon

TAIWAN’S SILICON SHIELD

Intro: The term “Silicon Shield” refers to the geopolitical theory that Taiwan’s dominance in the global semiconductor industry acts as a deterrence against a Chinese invasion. But the dynamics are complicated; there is now a diversification risk, and experts differ on the safeguards of Taiwan’s security

Behind the nondescript grey buildings that line the streets of Hsinchu lies one of the most important pieces of technology in the world.

Whirring away inside are rows of white machines that are so advanced – and so secretive – that only a select few have ever been allowed inside.

This is Taiwan’s “Silicon Valley” and these facilities produce the majority of the world’s semiconductors – small microchips that power virtually every electronic device in use today, from coffee machines to fighter jets.

Every country in the world relies on these chips, including China, which despite threatening to “reunify” Taiwan by force, imports nearly half of the island’s semiconductors.

Economists warn that an invasion of Taiwan would cost the world’s economy £7.5trillion. That’s far more than the cost of the Russian invasion of Ukraine or the Covid-19 pandemic.

It is argued that this very fact would act as a key deterrence against Beijing following through on its threats. China knows, too, that if it does invade, its economy would take a direct hit from the fallout.

Known as the “silicon shield”, the theory implies that Taiwan’s semiconductor industry offers a de facto security blanket, which would stop China from invading – both because of its own dependency on the computer chips and the US’s, which would come to Taiwan’s defence.

Taiwan’s former president, Tsai Ing-wen, popularised the theory in 2021 when she wrote that the silicon shield “allows Taiwan to protect itself and others from aggressive attempts by authoritarian regimes to disrupt global supply chains”.

Nonetheless, leading Taiwan companies within the semiconductor industry have been moving production sites to countries such as China and the US.

Experts have warned that this is effectively disintegrating Taipei’s valuable economic deterrence, making it more likely that Beijing would attack Taiwan.

The monopolistic position

Taiwan produces approximately 60 to 70 per cent of all the world’s semiconductors and more than 95 per cent of the advanced chips.

While thousands of companies are involved in semiconductor production, in Taiwan the industry is synonymous with one name – Taiwan’s Semiconductor Manufacturing Company (TSMC).

Founded in 1987, the company now makes up more than 60 per cent of the global market share and 9 per cent of Taiwan’s GDP. It is the most important company to the country’s economy and, in many ways, its national security.

It is one of more than 400 companies based in the Hsinchu Science Park, a concentrated industrial zone in central Taiwan often compared to Silicon Valley in the US.

The park’s unique “ecosystem” is one of many reasons that Taiwan has become a global leader in the semiconductor industry. Analysts speak of the “cluster effect” because of the availability of spare parts, equipment, material, design, software, integrated circuit manufacturing, and assembly tests all situated in one place. There is a complete supply chain, a complete ecosystem.

TSMC’s monopoly over the industry in Taiwan and around the world is often linked to its unprecedented structure as a foundry model. This means it manufactures chips for other companies but is not responsible for the designs. Instead, companies like Apple and Nvidia come to TSMC with orders for products they want to build. By choosing not to design, manufacture, or market any semiconductor products under its own name, the company ensures that it never competes with TSMC’s customers.

A wake-up call to the growing threat

While most of its production is still based in Taiwan, the company has gradually been opening fabrication plants, factories where semiconductors are made, in China, the US, and Japan.

There is one under construction in Germany, which is set to begin operations by the end of 2027. TSMC announced in March that it plans to invest an additional $100bn (£75bn) to grow its US manufacturing operations.

It is believed that TSMC and other companies in the supply chain are moving production out of Taiwan in response to the growing threat from China. Beijing’s increasingly hostile rhetoric towards Taiwan, and its routine shows of force toward the island, has spooked foreign governments and semiconductor customers.

Researchers on Taiwan at the US-based Hoover Institution, propagate that the Covid-19 pandemic served as a wake-up call for many companies reliant on chips from Taiwan and had to scramble overnight when their supply was interrupted.

It offered an insight into what would happen if China launched an attack against Taiwan, which could result in the supply of chips being permanently cut off.

The Institution says that by having over-concentration from one supplier located in one place is a big problem for TSMC’s business model in the new world. It also points to the economic benefit of having some supply or some production that’s closer to its ultimate customers.

Kowtowing to the US

Pressure from the US government and the Trump administration specifically has also been a factor in moving production out of Taiwan. Trump’s MAGA – Make America Great Again – is wholly directed to bring manufacturing back to the United States. That’s a prime reason why America intends to build its own manufacturing infrastructure for semiconductors.

But this means that Taiwan could lose an element of its deterrence. If the US is making its own semiconductor chips, rather than relying on Taipei’s, it may be less likely to come to Taiwan’s defence in a war.

The US is Taiwan’s main defence supplier, responsible for equipping the island with virtually all of its military technology. Taiwan is beholden to the US in its ability to make or break a future conflict with China.

War game simulations have shown that the US’s decision to come to Taiwan’s defence could be the difference between the country remaining autonomous and it falling under the auspices of Chinese control.

However, TSMC has kept an insurance policy. It has made sure that only its mature chips will be manufactured overseas. The production of advanced chips will remain in Taiwan.

In fact, in October, Taiwanese officials criticised and highlighted a proposal by the US commerce department, who said that Washington was talking to Taipei about a “50-50” split in semiconductor manufacturing. The response from Taiwan was swift: “No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield”.

Diversification risk

While the diversification of TSMC’s production and the semiconductor industry more generally offers a safety net for other countries, experts disagree on how this affects Taiwan.

Some believe that increasing the number of TSMC fabrication plants around the world strengthens Taiwan’s ties with other nations. By investing outside of Taiwan – such as in Europe, America, or Japan – these countries become bonded with TSMC. Others have also said that by operating fabrication plants in other countries will give them a stronger incentive to care about what’s happening in the Taiwan industries and provide increased vigilance of security threats than previously would have been known.

In theory, at least, this could support the second branch of the silicon shield argument. This stipulates that the US and allies are more likely to come to Taiwan’s defence in the event of a conflict, thereby deterring China.

However, other experts are concerned that if reliance on Taiwan’s chip production decreases, and China is able to source its semiconductors outside the country, there will be less standing in Beijing’s way.

Those within the industry are also worried about Beijing’s habit of stealing innovations from other countries. Building a competitor that can beat you through technological pilferage are efforts to undermine the island’s defences.

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Britain, Europe, Government, Politics, Russia, Society, Ukraine, United States

Europe must awaken or face great insecurity in 2026

EUROPE

THE great Victorian jurist, Sir Henry Maine, wrote: “War appears to be as old as mankind… but peace is a modern invention”. Events in the early part of 2026 will doubtless prove his wisdom by showing the awful fragility of that particular invention.

Even if they had never heard of Maine, the most complacent Europeans should have learnt from Vladimir Putin’s relentless onslaught against Ukraine that peace is neither a natural state nor the default setting of advanced countries, but rather a historical aberration that can only be preserved through strength and vigilance.

Yet, in 2025, we discovered how Europe remains divided between nations that grasp this lesson – or never forgot it – and those that cling with obstinance to old delusions. Leading the former category are Poland, Finland, Estonia, Latvia, and Lithuania. Having broken free of the Kremlin within living memory, these countries know exactly what it means to be invaded by Russia: they will do anything to prevent this from happening again.

And what of Britain? Despite Sir Keir Starmer’s grandiose rhetoric (“a battle-ready armour-clad nation”), Britain remains firmly imprisoned in the camp of the deluded. The PM revealed his priorities in the Budget when he preferred social policies over defence, such as appeasing Labour backbenchers by abolishing the two-child benefit cap. This Government will allocate another £17bn to welfare by 2030, the exact sum that would have allowed Britain to increase defence spending to 3 per cent of GDP. This looks as if Sir Keir has decided to place his own political survival – and the prejudices of his party – before the national security of his country, and for that there is bound to be a reckoning.

The outcome of those decisions is that Britain will enter 2026 at greater risk than was necessary. The perils ahead could scarcely be greater. The first and most immediate danger is that Donald Trump could collaborate with Putin to impose Russia’s peace terms on Ukraine. The guns along the frozen 800-mile front might then fall silent, but any respite would almost certainly be temporary while Russia rearms and regroups. If Putin achieves what he believes to be victory in Ukraine, he would be emboldened to come back for more. We should remember that today’s tragedy in Ukraine is Putin’s third war of attrition and conquest since the assault on Georgia in 2008. Like all aggressors, his appetite remains insatiable.

If there is a flawed peace in 2026, Putin’s next move could be a renewed attack on Ukraine, to achieve his original goal of subjugating the entire country. He might consider still more dangerous options. If he concludes that Mr Trump no longer cares about defending America’s allies, Putin could risk attacking a NATO member and the signs are ominous. If so, Britain would be obliged to stand with our allies and go to war with Russia, the world’s biggest nuclear power. Do we in Britain have any idea of what this would entail, or where such a crisis might lead?

There are still ways of ensuring that we never have to find out. We can rally our European allies to deliver more support to Ukraine, protecting Volodymyr Zelensky from being muscled into a false peace that rewards aggression. And we must do whatever is necessary to secure America’s commitment to NATO. Both imperatives require Britain and the rest of Europe to emulate Poland and its neighbours and spend far more on defence.

The second danger and the threat is rising is that China’s colossal military build-up might culminate in a confrontation with the United States and its allies in the Pacific. In 2025 alone, China commissioned 14 frigates and destroyers into its fleet; the Royal Navy, by contrast, has only 13 of these warships. 2026 has begun with China conducting intensive exercises in the waters around Taiwan, apparently simulating a blockade of that democratic island.

A full-scale invasion of Taiwan remains unlikely, this year, though Xi Jinping is believed to have ordered the People’s Liberation Army to be ready in 2027. But no possibility can be excluded and China’s lightning military expansion will heighten the danger. That threat is likely to reach its peak later in this decade.

Elsewhere, Mr Trump is going to have to decide whether to go to war in Venezuela to overthrow Nicolas Maduro’s autocracy. The biggest deployment of US forces in the Caribbean for nearly 40 years cannot be sustained indefinitely. If the president orders US forces into action, the first new conflict of 2026 would be a regime change operation in Caracas, probably combining air strikes with covert action on the ground.

Another authoritarian anti-Western leader who may be fearing for his regime’s future is Ayatollah Ali Khamenei, the Supreme Leader of Iran. The new year is opening with mass protests in Tehran and other cities.

The Ayatollah’s authority was severely weakened by the successful Israeli-US strike on Iran’s nuclear plants last June. As Khamenei approaches a point of maximum weakness, there must be a chance that 2026 could see the downfall of Iran’s regime, though no-one knows who will take over.

Above all, this has to be the year when Europe finally awakens to the threats and relearns the art of defending itself against aggression. If not, it may be too late to save the modern invention of peace.

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Arts, Books, History, Nuclear Weapons, Russia, Society, United States

Book Review: The Nuclear Age

LITERARY REVIEW

FOLLOWING that day in the summer of 1945 when, on a testing ground in the New Mexico desert – when the first nuclear bomb exploded – many people of that era and generation have lived their entire lives under the threat of universal extermination.

It caused Robert Oppemheiemer, the brilliant scientist heading the US’s Manhattan Project, to proclaim melodramatically (but entirely accurately) an ancient Hindu prophecy: “I am become Death, the destroyer of worlds.” Just three weeks later, in early August, the bomb was used for real for the first time against an enemy – in a blinding flash, and a shockwave that destroyed the Japanese city of Hiroshima.

Pavements melted, skin peeled off faces, more than 60,000 perished immediately, and in the following five months another 60,000 died from injuries and radiation.

Three days later, Nagasaki was given the same treatment. The original target had been a different city but heavy cloud cover saved it, diverting the US B29 bomber 125 miles south. Two square miles of the city centre were pulverised. Some 70,000 people died a horrible death.

And amazingly, those were the last fatalities of nuclear explosions. Eighty years on the world has somehow managed to avoid that apocalyptic and life-threatening tripwire of its own making.

So far.

This history is necessary to understand and should be imprinted on all our brains. It’s a miracle we are still here. Because in an unstable world (and increasingly so) we are all one reckless move, one miscalculation, one technical glitch, one individual’s moment of madness, away from Doomsday.

How the lid has been kept on nuclear Armageddon is plotted by acclaimed historian Serhii Plokhy in this chilling and bewildering book.

Bewildering because all we have ever done is make the threat greater, while posturing about the importance of containing it, claiming nonsensically that massive overkill is making the world a safer place.

In 1962, Soviet Union ships carrying nuclear weapons headed for a clash with an American blockade of Fidel Castro’s Cuba in the Cuban Missile Crisis. This was the nuclear confrontation between US President John F. Kennedy and Soviet leader Nikita Khrushchev that came toe to toe.

If no one blinked, it was inevitable that those red buttons would have been pushed, missiles would’ve been fired, and the world would have been a goner. The end of history itself had beckoned.

Other than being flippant towards the world ending, how else could you deal with the apocalypse being hours, minutes, or just seconds away? Because the very idea is impossible to grasp. Do you hide under a desk as a civilisation built up over millennia is blown apart and a world of abundance is reduced to ashes?

With Cuba, the moment passed. The world survived. Plokhy argues that neither Kennedy nor Khrushchev was ready to push the button. They both pulled back.

And next time? Can we rely on the same calculated response from today’s leaders, from the likes of Putin, Trump, Kim Jong-un, Xi?

Since that’s the threat we live under, and yet we not only get on with our lives and look the other way, but we up the arsenal – increasing the destructive power to the point of absurdity.

Only recently, Putin boasted of a new Russian super-submarine with “unstoppable” weaponry that can fire nuclear drones at Western coastlines from thousands of miles away. In direct response, Trump ordered the US to restart nuclear testing.

Escalation and proliferation like this are the underlying narratives of the nuclear age: the powerful few believing they can keep the weapons to themselves, but finding all they have done is to provide an incentive to other nations to follow suit as quick as possible for fear of being left behind. The cat- and- mouse of the nuclear age; history is littered with such examples. The US threw its scientists into nuclear research for fear of Hitler getting there first and the Nazis snatching a late victory in the Second World War.

Then Stalin had to have his, Britain, too, then France, China, Israel, India. The club just got bigger; containment became harder and much more problematic. World leaders talked non-proliferation, but that’s easier said than done once the genie is firmly out of the bottle.

That genie is now ubiquitous. Officially there are nine fully fledged nuclear-armed states in the world. Yet, the most worrying assertion of all in this deeply disturbing book is that around 40 more states have access to the requisite technology, raw material and capability to produce nuclear weaponry, in some cases at very short notice.

That’s the size and extent of the timebomb each and every global citizen is sitting on.

Those scientists – the Einsteins, Bohrs, and so on – who first developed the principle and then the practicality of releasing unimaginable amounts of energy through nuclear fission and fusion, begged their political and military leaders to concentrate on the massive peaceful benefits of their discoveries.

Presidents and generals agreed; but first, they said, there is the enemy to defeat, this opponent and adversary to match, this military threat to see off.

Eight decades on, that’s where we still are. Plokhy’s account of the nuclear age hardly inspires optimism for the future.

He concludes that fundamentally it is the fear of annihilation that has kept us from the brink – the general agreement that it is in no one’s interest to perish in a global nuclear apocalypse. That held true in the Cuba crisis. He writes: “We must enhance the instinct of self-preservation shared by friends and foes alike to save the world once again.”

And keep our collective fingers crossed.

– The Nuclear Age by Serhii Plokhy is published by Allen Lane, 432pp

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