Taiwan's control of over 90 per cent of the world's leading-edge silicon chips poses a critical vulnerability to the global AI investment boom. The island's semiconductor industry, one of the century's most remarkable industrial stories, produces chips that power western smartphones, data centres, AI models, and smart weapons systems. Yet Taiwan sits on a geostrategic faultline just 100 miles from China.

Beijing's long-standing mission to incorporate Taiwan has been accompanied by significant military buildup. Any serious disruption to Taiwan's chip production would likely bring the US AI investment boom to a screeching halt and rattle global stock markets heavily leveraged on Big Tech's colossal AI bet. The US has belatedly recognised its over-reliance on Taiwanese manufacturing, with Treasury Secretary Scott Bessent warning that a blockade or destruction of Taiwan's capacity would constitute an "economic apocalypse."

Despite US efforts to reduce dependence through the $52bn Chips Act and tariffs on foreign chipmakers, American tech giants like Apple, Nvidia, AMD, Qualcomm, and Broadcom have no viable alternative for advanced chip manufacturing at scale. Even US-made chips require final processing in Taiwan. While Taiwanese leaders believe their silicon shield protects them from attack, the possibility of Chinese action remains uncertain. Recent US intelligence assessments suggest no invasion is planned for 2027, though prediction markets put the chance of Chinese invasion by 2027 at 20 per cent.