WASHINGTON, June 12 (UPI) -- Taiwan may be an island of just over 23 million people, but what happens there could ripple across the global economy. The small democratic nation produces the vast majority of the world's most advanced semiconductors -- chips that are used in everything from smartphones and electric cars to defense systems and spacecraft.
Taiwan Semiconductor Manufacturing Co. Ltd. "produces roughly 90% of the most sophisticated computer chips, and the loss of that would be devastating," said Steven David, a professor of political science at Johns Hopkins University in Baltimore. "We can't get around without it."
For Taiwan, this manufacturing dominance isn't just economic -- it's strategic. Analysts call it the island's "silicon shield." The world relies heavily on Taiwan's chips, which deters China from launching a military attack and pushes allies like the United States to come to Taiwan's defense.
The geopolitical stakes around Taiwan's semiconductor dominance have soared as China escalates military pressure, through increased fighter jet incursions, large-scale naval drills and explicit threats of reunification.
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