Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

Threats to Taiwan, the self-governing island only slightly bigger than Maryland, are sending shivers through the global tech industry.

Why it matters: Taiwan is home to 92% of the world's leading-edge chip manufacturing operations and a vital center for producing other tech components, including laptops and PC motherboards.

Driving the news:

  • Just this week, the U.S. military warned that China could be accelerating its longstanding efforts to regain control of Taiwan.
  • A global semiconductor shortage has highlighted the world's dependence on chips, as well as the increasingly vital role that Taiwan Semiconductor Manufacturing Co. (TSMC) plays in the industry.
  • That's because most companies that design chips today — Qualcomm, Nvidia and Apple among them — don''t actually do the manufacturing, instead relying on companies like TSMC.

What they're saying: “This is the most important 14,000-square-mile island in the world,” says Stephen Ezell, VP of global innovation policy at the Information Technology and Innovation Foundation.

Catch up quick: Ever since China's Nationalists were defeated by the Communists in 1949 and fled to Taiwan, Beijing has viewed the island as part of China's sovereign territory. But it operates independently, with its own elections, military, and currency.

  • Around a dozen countries have formal diplomatic relations with Taipei and many others, including the U.S., maintain informal relations.
  • The U.S. consumed more than $63 billion worth of Taiwanese tech exports throughout the first eight months of last year, or 32 percent of the island's output. China accounted for 30% and Europe about 22%, per Taiwan's Industrial Technology Research Institute.
  • If Taiwan's chip production were permanently disrupted, the Semiconductor Industry Association estimates it would take three years and $350 billion in investment to build enough capacity to replace it.

The big picture: Foreign policy experts and tech trade groups have been sounding alarms about the consequences if Taiwan were to come under tighter Chinese control.

  • “The threat is manifest during this decade — in fact, in the next six years,” Admiral Philip Davidson, the top military leader in the Asia-Pacific region, told a Senate hearing last month, per AP.

Between the lines: The recent crackdown in Hong Kong following passage of a strict "national security law" is seen as a wake-up call with regards to Taiwan.

  • "Until Beijing changes its current policy, it’s critical to point out that the PRC’s formula for unification with Taiwan is still based on 'One Country, Two Systems' — the model that it applies to Hong Kong," says Russell Hsiao, executive director of the Global Taiwan Institute. "And it’s clear as day for people to see how that’s going for the people of Hong Kong."

That's why many in the industry are calling for the U.S. to be clearer about its support for Taiwan and, at the same time, to encourage investment in domestic chip production.

  • "I think that Taiwan needs to be the center point of the Biden Administration national security economic strategy in the Pacific and Asia," Ezell said.
  • "China is in the process of testing this administration. It is going to continue to exert pressure on Taiwan on the U.S.-Taiwan relationship."

Go deeper

Apr 8, 2021 - World

Hong Kong democracy activist Nathan Law granted asylum in Britain

Hong Kong pro-democracy activist Nathan Law. Photo: David Cliff/NurPhoto via Getty Images

Nathan Law, a former lawmaker and prominent pro-democracy activist in Hong Kong, announced Wednesday that he has been granted asylum in the U.K.

Why it matters: Britain's decision to grant Law asylum, and to offer incentives to other Hong Kong residents to resettle in the U.K., will likely increase tensions between the U.K. and China, Reuters reports.

GM slows production in some plants due to semiconductor chip shortage

Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

General Motors is reducing production in some of its North American plants due to a global semiconductor chip shortage.

Why it matters: The chip shortage is affecting automotive companies around the world, with semiconductors functioning as a key component for steering systems, car brakes and other automobile features.

Apr 8, 2021 - World

Sens. Menendez, Risch unveil bipartisan bill to counter China

Sen. Jim Risch, right, speaks to Sen. Menendez, left, during a confirmation hearing on March 23. Photo: Greg Nash/The Hill/Bloomberg via Getty Images

Senate Foreign Relations Committee Chair Bob Menendez (D-N.J.) and ranking member Sen. Jim Risch (R-Idaho) on Thursday announced their finished bipartisan proposal to counter China's rising political and financial power.

Why it matters, via Axios' China reporter Bethany Allen-Ebrahimian: This bill marks a culmination of years of growing bipartisan concern, and the rise of an increasingly authoritarian China. If it passes, it will send a strong signal to Beijing that both parties are unified in defending democratic values from authoritarian encroachment.