A report by the New York Times has said that US government officials have for years warned major American tech companies – that included Apple, Nvidia, Qualcomm and AMD about the risk of relying heavily on Taiwan for advanced computer chips. In private briefings held in Washington and Silicon Valley, national security officials have cautioned that China could attempt to retake Taiwan, a move that could severely disrupt global chip supplies. Such a disruption, officials said, could cripple the US technology sector and trigger a major economic crisis. Despite repeated warnings from successive administrations, the report says many companies were slow to shift their supply chains.As per the report, in July 2023, Tim Cook of Apple, Jensen Huang of Nvidia and Lisa Su of Advanced Micro Devices (AMD), entered a secure briefing room while Qualcomm CEO Cristiano Amon joined virtually. During the meeting, William J. Burns, the head of the Central Intelligence Agency, and Avril Haines, the director of national intelligence, talked about how China’s military spending could mean a move on Taiwan in 2027. Afterward, Mr. Cook told officials that he slept “with one eye open,” the NYT report says.
US warnings on Taiwan and chip dependence
Taiwan produces roughly 90 percent of the world’s most advanced semiconductors, primarily through Taiwan Semiconductor Manufacturing Company, or TSMC. As per the report, tech executives were warned that a Chinese blockade or military action could cut off chip supplies critical to smartphones, laptops, data centres and artificial intelligence systems. According to it, former President Joe Biden and the current President Donald Trump both tried different approaches to push change. The Biden administration offered billions of dollars in incentives under the CHIPS Act to boost domestic chip manufacturing. The Trump administration, on the other hand, has threatened heavy tariffs to pressure companies to buy chips made in the US. Despite this, many continue to source most of their chips from Taiwan due to cost, efficiency and advanced manufacturing capabilities.
Dependence on Taiwanese chips an ‘economic risk’, warns US
The report says that the US officials have increasingly described this dependence as a major economic risk. Treasury Secretary Scott Bessent recently warned that a disruption in Taiwan could trigger what he called an “economic apocalypse,” citing the role of chips in global trade and growth. “If that island were blockaded, that capacity were destroyed, it would be an economic apocalypse,” Bessent said.While some companies, including Nvidia and Apple, have recently pledged to increase US investments, the report notes that meaningful change will take years. New factories take time to build, and US-made chips are often more expensive and less advanced than those produced in Taiwan.
