Taiwan's Election Amidst Rising Defense Demands | Global ETS

Taiwan's Election Amidst Rising Defense Demands and Semiconductor Struggles

Jan 12, 2024News


The WSJ's article highlights advanced defense systems, such as Norway's National Advanced Surface-to-Air Missile System (Nasams), capable of protecting the White House airspace. However, growing military orders face challenges due to complex production processes, slow times, and supply chain issues. Concerns about potential shortages arise from the Taiwan presidential election, with implications for Western combat capabilities, particularly in the semiconductor industry, prompting calls for diversifying the computer chip supply chain and international support for Taiwan's defense strategy amid geopolitical tensions with mainland China.


An article in the Wall Street Journal on January 4, 2024, first showed us multiple advanced and precise defense systems. KONGSBERG, Norway—A factory here west of Oslo produces a missile-defense system that can shoot down drones, helicopters, and other airborne threats from almost 25 miles away. Capable of launching 72 missiles into the sky at once, the National Advanced Surface-to Air Missile System, or Nasams, is what protects the airspace over the White House. When first deployed in Ukraine in 2022, it recorded a 100% success rate shooting down cruise missiles and drones in its first few months.

But corresponding to the growing military orders year after year are complex production processes and slow production times. Manufacturers in Western countries have piled up a backlog of new orders to produce missiles and other weapons systems in the face of potential threats, but even 24/7 shifts are far from enough to meet the booming demand due to supply chain problems and labor shortages.

Well, the shortages that are increasingly worrying key U.S. and NATO officials come from the recent Taiwan presidential election, which is in full swing, which will put Western countries' combat capabilities facing unprecedented challenges. An article by Julian E. Barnes in January 2023 already discussed the harm to the industry's chip industry supply chain if Taiwan's semiconductor factory ceases production. The article mentioned that on the Ukraine issue, the United States will not send troops to fight alongside Kiev to prevent Moscow's intervention, but for Taiwan, due to its importance to the U.S. economy, it may be more difficult for the United States to stay out of the matter. The report pointed out that the United States’ long-standing policy towards Taiwan requires strengthening its defense and maintaining strategic ambiguity on whether Washington will intervene in conflicts surrounding the island.

The article reports on a war game conducted by a think tank in Washington, starting from the sudden failure of three semiconductor foundries in Taiwan. The war game highlighted the United States and the world's dependence on Taiwan's semiconductor industry, and how this dependence could lead to international crises. The exercise examined possible Chinese actions, including economic coercion and cyber operations, to seize or harm Taiwan's semiconductor industry. The United States is overly dependent on the global supply chain for computer chips, especially high-end microchips from Taiwan. The report emphasizes the importance of diversifying the computer chip supply chain and calls for international support in Taiwan's defense strategy.

Then we should also understand what the Taiwan presidential election will look like as of January 8, 2024. Under the special historical environment, this presidential election will have an impact far beyond the Taiwan region due to the particularity of geopolitics and the continued pressure from mainland China. The policy issues, economic issues and inflation issues that should usually be of concern have been overwhelmed by issues of cross-strait relations. Tsai Ing-wen's Vice President Lai Ching-te, representing the Democratic Progressive Party, emphasized safeguarding Taiwan's democratic autonomy, while Kuomintang candidate Hou Yuyi promised a more conciliatory approach. Wall Street analysts believe that in the eyes of Taiwanese voters, regardless of party differences, the common theme should be that Taiwanese voters want to maintain democracy. Especially after witnessing the situation in Hong Kong, they realize that relations with Beijing involve broader interests. But Beijing has not ruled out taking a tougher stance if Lai wins. But at the same time, analysts pointed out that he believed Lai's policy victory was not the policy itself, but Taiwanese voters' response to Beijing's threats.

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