How Taiwan, U.S., and China form the Silicon Triangle

TAIPEI (TVBS News) — The semiconductor industry, a cornerstone of technological advancement and economic power, is playing an increasingly critical role in shaping global relationships.

This is particularly evident in Taiwan, where the industry has become central to the island's economy and its position on the world stage. Orville Schell, co-editor of "Silicon Triangle: The United States, Taiwan, China, and Global Semiconductor Security."

The book, which is about to be released in Mandarin in Taiwan by TVBS News, provides a detailed analysis of this dynamic and its implications for Taipei, Beijing, and Washington. 

Taiwan's Pivotal Role in the 'Silicon Triangle'
"The semiconductor industry already is shaping the relationship between major powers," Schell told TVBS World Taiwan, emphasizing the significant influence of Taiwan despite its relatively small size. "Taiwan's not a major power, but it is a major producer," he noted, highlighting the island's crucial role in the global semiconductor supply chain.

Schell describes the "Silicon Triangle" as the interdependent relationship between Taiwan, the United States, and China, with Taiwan's TSMC (Taiwan Semiconductor Manufacturing Company) being a central player. "The triangle really begins right here in Taiwan with TSMC, which is the majority faber of semiconductors," Schell explained. He pointed out that while other countries are involved, the most critical legs of this triangle are Taiwan, the United States, and China. 

Geopolitical Tensions and Technological Decoupling
The interdependence within the "Silicon Triangle" also brings significant challenges, particularly in the context of rising geopolitical tensions. Schell warns that the potential for decoupling between these key players could have severe consequences.

"Decoupling isn't just something we do because we want to or don't want to. It is being pushed, conditioned by China," he said. Schell underscores that while the United States and Taiwan may prefer to maintain some level of cooperation, China's actions could force a separation.

This sentiment is reinforced by recent global events, particularly the ongoing conflict in Ukraine, which Schell cites as an example of how quickly decoupling can become inevitable once a conflict begins. "When a war starts, it's over. Then you decouple. You can't help it. There's no option," Schell remarked, drawing parallels between the geopolitical situations in Europe and East Asia. 

The Future of Semiconductor Dominance
Despite the risks, Schell believes that the "Silicon Triangle" provides leverage for both Taiwan and the United States, as China's semiconductor industry still relies heavily on Taiwan's production capabilities. However, he cautions that China is working rapidly to achieve self-reliance in this critical sector, echoing the principles of former Chinese leader Mao Zedong.

"Xi Jinping would like to accomplish self-reliance on the semiconductor field for China," Schell stated, acknowledging the difficulty of such a goal but recognizing it as a clear aspiration of China's leadership.

As SEMICON Taiwan, one of the world's leading semiconductor trade shows, opens in Taipei, these issues are at the forefront of discussions among industry leaders. Schell emphasized the importance of maintaining technological leadership and navigating the complex geopolitical realities that come with it.

"It's absolutely essential that not only Taiwan and the United States have close relationships on this critical tech industry, but that also we bring in other major players like Japan, (South) Korea, and Holland," he said.

The "Silicon Triangle" remains a central focus as Taiwan navigates its role in the global semiconductor industry. With rapid technological advancements and an ever-evolving geopolitical landscape, the island's position is likely to remain pivotal in the years to come.