The Taiwan Semiconductor Manufacturing Company produces the majority of the world’s most advanced logic chips. Its fabs in Hsinchu and Tainan manufacture the processors that go into every iPhone, every data center GPU, every advanced weapons guidance system, and most of the AI training infrastructure that has been built in the past three years. No other company operates at the frontier process nodes at anything close to TSMC’s volume. No other geography concentrates this much irreplaceable productive capacity in a single location. The decision by the global electronics industry to concentrate its most advanced semiconductor production on an island that a nuclear-armed neighbor claims as its own territory is the most significant strategic miscalculation of the early twenty-first century, and it has not been corrected.

Taiwan’s largest trading partner is the People’s Republic of China. By a significant margin. The two sides of a strait that are separated by competing political claims, opposing military forces, and seventy-five years of antagonism trade more with each other than Taiwan trades with the United States and Japan combined. This fact sits at the center of the Taiwan strategic problem in a way that military analysis consistently underweights: the economic integration that has developed between Taiwan and China since the 1990s has created dependencies that shape the behavior of Taiwanese businesses, the political calculations of Taiwanese voters, and the investment decisions of multinational companies with operations on both sides.