Denny Roy
US Secretary of Commerce Howard Lutnick brought new attention to Taiwan’s “silicon shield” in a September 28 interview, during which he said Taiwan should move half of its world-leading semiconductor manufacturing capability to the United States.
Taiwan produces 60% of the world’s semiconductors and 90 of the most advanced chips – not to mention that the industry accounts for 15%of Taiwan’s GDP.
Taiwan Vice-Premier Cheng Li-chiun, who led Taiwan’s trade talks with Washington, on October 1 dismissed Lutnick’s idea, saying, “Our negotiating team has never made any commitment to a 50-50 split on chips … nor would we agree to such conditions.”
Cheng’s response reflects the belief of Taiwan’s people that global reliance on Taiwan-made chips helps protect the island from a Chinese military assault. That notion has some merit, but it also has limits.
The term “silicon shield” is attributed to a 2000 article by Journalist Craig Addison, who argued that the US would militarily defend Taiwan to “protect its supply of information technology products from Chinese aggression,” just as the US military intervened to expel invading Iraqi forces from controlling oil supplies in Kuwait in 1991.
The updated version of the theory is that China won’t attack Taiwan because this would interrupt the supply of semiconductors upon which China’s economy depends. China gets about one-third of its semiconductors from Taiwan.
Furthermore, as Addison argued, the reliance of other countries on semiconductors from Taiwan increases the likelihood they would oppose (in the US case, militarily intervene against) China’s attack.
Accordingly, moving chip production out of Taiwan would make Taiwan less secure by weakening China’s disincentive to attack.
The full story, however, raises doubts about the efficacy of the shield.
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