The intentions of the People’s Republic of China toward Taiwan are clear—it intends to take possession of the island and thereby “reunify” China. U.S. House Speaker Nancy Pelosi’s visit to the island, during which she met with political leaders as well as the chair of Taiwan Semiconductor Manufacturing Co., provoked live-fire military exercises that demonstrate the ability of the People’s Liberation Army to de facto blockade the island. The ongoing fourth Taiwan Strait crisis should not be interpreted as a one-off cycle of provocation and reaction. Rather, it’s a portent of tensions and escalations that will continue to occur as the PRC’s 2049 centennial approaches.
A successful or attempted conquest of Taiwan would either give the PRC full control over the island’s semiconductor industry or result in the partial or total destruction of that industry. Either outcome has tremendous implications for geopolitics, technological innovation and economic growth. U.S. business and political leaders need to start asking and answering three questions, and soon:
- What would the relationship between the U.S. and China look like if the PRC controlled Taiwan with a mostly intact semiconductor supply chain?
- What would happen if Taiwan’s semiconductor supply chain were damaged or destroyed?
- Based on the answers to these questions, what should be done now to prepare?
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