The looming possibility of a Chinese military invasion of Taiwan has raised fears about a global disruption of advanced semiconductor chips, many of which are produced in and then exported from Taiwan. Some companies are attempting to catch up to Taiwan’s advanced chip production by scaling up production in the U.S. or elsewhere, but it is unclear whether those efforts would be enough to mitigate the international supply chain disruptions brought on by a Chinese invasion.

Watch the video above as Straight Arrow News contributor Peter Zeihan discusses the efforts other companies are making to catch up with Taiwan and questions the potential impact of these efforts if Taiwan were to face a Chinese military invasion.

The following is an edited excerpt from Peter’s Sept. 16 “Zeihan on Geopolitics” newsletter:

Taiwan has positioned itself as the dominant player in the semiconductor industry, but what would happen if a conflict with China broke out? Well, if semiconductor supply chain vulnerabilities are top of mind, then sure, this should be of concern (but you should also be worried about the thousands of companies and locations that are nowhere near Taiwan that make up the vast bulk of the supply chain).

Let’s move past those concerns for today and break down what Taiwan and companies like TSMC (Taiwan Semiconductor Manufacturing Company Limited) have planned for the future. We’ve seen Taiwan “cooperating” with the U.S. and Japan in recent years, but what’s going on?

The Trump administration demanded that TSMC build the best facility they possibly could in the United States, and it is… not happening. Taiwan’s efforts in the U.S. are little more than a kabuki effort to appease the U.S. and maintain its favor. In contrast, new fabs in Japan are moving along swimmingly, as the Japanese didn’t insist upon the cutting-edge technology that the U.S. wanted.

While the U.S. has companies like Intel trying to replicate (and surpass) the advanced semiconductor technology of Taiwan, progress is difficult and I wouldn’t expect anything to come of it soon in the next year or two. Taiwan understands perfectly the situation that it is in and is playing its cards very strategically.