Silicon Valley’s dependence on Taiwan chips poses a major risk

Federal officials have long warned tech executives that Taiwan, a democracy roughly the size of Maryland that makes 90 percent of the world’s high-end computer chips, is a single point of failure for the global economy. In secret briefings in Washington and Silicon Valley, national security officials told leaders at companies such as Apple, AMD and Qualcomm that a Chinese blockade or invasion could choke off those chips and cripple the U.S.

tech industry. A confidential 2022 report commissioned by the Semiconductor Industry Association concluded that cutting Taiwan’s chip supply would trigger the largest economic crisis since the Great Depression, with U.S. output plunging 11 percent and China’s falling even more.

Treasury Secretary Scott Bessent warned at Davos that “the single biggest threat to the world economy, the single biggest point of single failure, is that 97 percent of the high-end chips are made in Taiwan.” As artificial intelligence accelerates demand for those chips, officials say the stakes for the U.S.

Taiwan, Silicon Valley

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