Why Taiwan Matters
President Biden has made headlines with his declaration that the United States would “get involved militarily to defend Taiwan,” seemingly dispensing with decades of strategic ambiguity. Why should Americans care? What makes Taiwan worth defending?
In short, despite being an island slightly larger than Maryland, Taiwan punches above its weight and possesses enormous geostrategic value. In recent decades, the island nation and its scions have given the world bubble tea, cat cafes, Jeremy Lin, and the N95 mask - not to mention an early warning about COVID. It is the world’s 22nd largest economy and, more importantly, a key cog in supply chains as its leading semiconductor manufacturer.
Semiconductor chips enable artificial intelligence and high-performance computing, powering everything from phones and electronics to vehicles and weaponry. Taiwan’s manufacturers account for more than 60% of total global semiconductor foundry revenue; a single company, Taiwan Semiconductor Manufacturing Co. (TSMC), accounts for roughly 54%. TSMC “has an even tighter stranglehold on the most advanced processors,” TIME notes, “with more than 90% of market share by some estimates.”
And Taiwan’s competitive edge is essentially impossible to replicate overnight. Its industry dominance was built over the course of decades of robust investment and outsourcing to the island’s semiconductor foundries. The technologies involved are incredibly advanced, and Taiwan’s success is also enabled by the support of a gradually homegrown high-tech cluster served by highly skilled and specialized workers.
Given its reliance on semiconductors to feed its own immense electronics manufacturing industry, China might be perceived as loath to attack the island and damage foundries in the process - making them a sort of “silicon shield.” But given the rest of the world’s own reliance on semiconductors and the ever-increasing role they play in the technologies of the future, China is more and more likely to covet the industry as a “silicon prize.” As much as demand for Russian oil and natural gas has buttressed that country against global economic sanctions, China would exercise even greater leverage over global economies if they were able to seize Taiwan’s foundries intact.
Yet Taiwan’s most valuable commodity is something less physically tangible. Taiwan is a model democracy in a time of global democratic recession. In 2021, Freedom House gave Taiwan a global freedom score of 94/100, tied for 7th best in the world. In marked contrast, the United States clocked in at 83/100. Meanwhile, Freedom House praised Taiwan’s “vibrant and competitive democratic system” and called out the “open digital platform vTaiwan.”
vTaiwan, created by homegrown civic hackers group g0v, is a novel experiment in getting feedback from citizens on contentious policy issues. Like other social media platforms, participants are free to share their opinions. vTaiwan differs by highlighting points of consensus, not only among like-minded people but across clusters of groups as well - thus discouraging the strife that has otherwise become commonplace online. It’s helped shape a dozen laws and regulations governing everything from Uber to online alcohol sales to fin-tech regulation.
Other examples of Taiwan’s digital democracy initiatives abound. There’s join.gov.tw, which enables petitioners that gather 5,000 signatures to meet with government ministries to incorporate their views into the policymaking process. There are additional collaborations between civic developers and the government, such as Cofacts and Mask Maps, a fact-checking chatbot and protective mask supply tracker, respectively. And there’s Taiwan’s model SMS-based contact tracing system, which has helped the government fight COVID while respecting citizen privacy - data is decentralized, to protect against cybersecurity breaches, and purged after 28 days. Taiwan, in other words, is actively engaging in democratic innovation.
As Freedom House’s latest annual report observed, “Global freedom faces a dire threat…The leaders of China, Russia, and other dictatorships have succeeded in shifting global incentives, jeopardizing the consensus that democracy is the only viable path to prosperity and security, while encouraging more authoritarian approaches to governance.” Taiwan’s semiconductors are ironically enabling those dictatorships to more effectively monitor citizens in both the real and virtual worlds and disseminate propaganda and disinformation. But they’re also enabling activists and creatives in Taiwan to reimagine democracy in the 21st century. The survival of global freedom may well depend on the continued freedom of Taiwan, its semiconductor industry, and its flourishing civil society.