The price of geopolitical rupture is no longer hypothetical. The past year has seen war in Ukraine, war in the Middle East, war between India and Pakistan, war between Thailand and Cambodia, US strikes against Iran and Venezuela, and President Donald Trump’s attempted land grab in Greenland.
Gantry cranes at the Port of Taichung in Taichung, Taiwan, on Thursday, May 23, 2024. Taiwan's economy expanded at the fastest pace in almost three years as global demand for artificial intelligence-related technologies fueled a boom in exports.
The island at the center of the artificial intelligence boom—and increasingly the global economy—lies on geological and geopolitical fault lines. Taiwan, the producer of most of the world’s advanced semiconductors, faces intensifying pressure from mainland China and growing uncertainty about US support. War doesn’t appear imminent. If it were to erupt, though, the shock to the global economy would be seismic.
The Taiwan Semiconductor Manufacturing Co. (TSMC) 12-inch Fab 16 facility in Nanjing, China, on Friday, Jan. 9, 2026. TSMC's revenue topped estimates, reinforcing hopes of sustained global AI spending in 2026 despite concerns about an industry bubble.
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