The administration of US President Joe Biden on June 4 released a 100-day supply chain review titled “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-based Growth.”
It lays out just how much the US — and the global economy — relies on Taiwan and its semiconductor industry.
From the US perspective, this reliance is considered a national security vulnerability.
The vulnerability is not limited simply to Taiwan, but also to the reliance on a cluster of additional countries all located in East Asia, mainly China, South Korea and Japan. The supply chain review explains in excruciating detail how semiconductors are designed, manufactured and packaged, making it easier to understand how the US lost its edge in this industry to Asian countries, with Taiwan being given a “spotlight.”
After reading the review, it is safe to say that the world runs on Taiwanese semiconductors. The administration notes that fact: “The global economy depends on Taiwanese firms for 92 percent of leading-edge semiconductor production.”
This reliance was a cause for concern under the administration of former US president Donald Trump, which was able to negotiate with Taiwan Semiconductor Manufacturing Co (TSMC) to build manufacturing centers in Arizona. Under the Biden administration, the US’ focus on Taiwan and its semiconductor industry should certainly continue.
Judging by the supply chain review, the US has much ground to make up — which could take time, many years and billions of dollars — to reduce its significant reliance. The review was just a first step in a long process.