Semiconductor Geopolitics in the 21st Century
The twentieth century’s major conflicts were often grounded in energy. The twenty-first is increasingly shaped by semiconductors. These microscopic chips run industry, defense systems, and artificial intelligence. That is the terrain of semiconductor geopolitics.
Control over chip design, fabrication, and distribution translates into influence. Nations with secure access to cutting-edge nodes and AI accelerators gain room to lead. Nations without that access risk strategic constraints.
Semiconductors do the work today that oil did in the last century, but with even greater stakes. They underpin innovation, sharpen defense systems, and channel where AI power accumulates. In this sense, chips are among the foundational infrastructure of global order.
Several policy developments show how states are reorienting around semiconductor sovereignty:
- In October 2022, the U.S. implemented new export controls targeting advanced chips and semiconductor manufacturing tools destined for China. These controls included restrictions on Nvidia-style GPUs and manufacturing equipment.
- These restrictions were expanded through 2023 and 2024 to include additional chip types, more equipment categories, and a larger set of entities subject to licensing.
- In December 2024, the U.S. government further strengthened export controls for AI, memory systems, and semiconductor tools to blunt China’s capacity for military and AI applications.
- In parallel, the U.S. directed Taiwan’s TSMC to suspend shipments of certain 7-nanometer or smaller chips to China, especially for AI/GPU uses.
- Beijing responded by discouraging its firms from procuring Nvidia AI hardware, while investing heavily in homegrown options such as Huawei’s Ascend chips and cluster-based orchestration systems.
These are not isolated policy decisions. They point to a deeper shift: semiconductors are treated as strategic assets. Export licensing, procurement directives, and industrial programs show how states see chips as tools of power, not mere trade goods.
This is a defining contest, over who will dominate AI, who will control dual-use technologies, and where innovation will converge. The architecture of leadership in this era demands clarity, not ambiguity. It demands strategies rooted in peace, resilience, and systemic integrity. That is the work Awakened Global Governance must take on.
Taiwan’s Central Role in Semiconductor Supply Chain Security
For decades, Taiwan has quietly carried a disproportionate share of the world’s digital infrastructure. At the heart of this is the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s most advanced semiconductor manufacturer. Its dominance is not just commercial; it is geopolitical. Taiwan semiconductor security has become one of the most sensitive strategic issues of our time.
The Quiet Power of TSMC
TSMC leads the advanced-node market, with more than 90% share at 3nm and an estimated 70–80% at 5nm, giving it unrivaled dominance at the leading edge of semiconductor fabrication, powering everything from smartphones to data centers to AI supercomputers. Its clients include Apple, Nvidia, AMD, and Qualcomm. This dominance gives Taiwan an outsized leverage in the global economy: industries and governments alike depend on the steady flow of chips fabricated on the island.
This concentration of capability elevates TSMC into a strategic asset in its own right. Its facilities in Hsinchu and Tainan are often described as the “silicon shield,” creating a form of deterrence by making Taiwan indispensable to global technology supply chains. This unique position is both a strength and a liability: it provides influence, but it also paints a target.
Vulnerability of a Single Point of Failure
The world’s dependence on one island for its most advanced semiconductors creates systemic risk. Any disruption, whether conflict across the Taiwan Strait, coercive pressure from Beijing, or a natural disaster like an earthquake or typhoon, could fracture the global chip supply. This is the essence of TSMC geopolitical risk.
Such dependency exposes vulnerabilities across sectors: automakers would face production halts, cloud companies would lose access to AI accelerators, and national security systems reliant on advanced chips would face immediate setbacks. In an interconnected economy, a bottleneck in Taiwan could ripple across continents within weeks.
This concentration highlights the urgency of semiconductor supply chain resilience. Diversifying advanced manufacturing across multiple geographies, investing in alternative fabrication capacity, and building redundancy into the ecosystem are not optional. They are imperatives for global stability. Without this, semiconductor dependency remains one of the largest hidden risks to economic security and peace.
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China’s Semiconductor and AI Strategy
Over the past decade, China has treated semiconductors as a matter of national sovereignty. Since 2015, Beijing has funneled more than $150 billion into its domestic chip sector through state funds, subsidies, and research programs in an effort to build capacity and reduce external dependence. Yet even this scale of investment falls short.
Self-sufficiency and sovereignty
Huawei has developed the Ascend AI processor line and built systems such as CloudMatrix, which connect hundreds of these processors into unified clusters. The DeepSeek-R1-Safe model was trained on a cluster of 1,000 Ascend chips. While a single Ascend processor does not match Nvidia’s H100 in raw performance, Huawei’s system-level integration demonstrates how scaling and orchestration can narrow the gap. This approach reflects the trajectory of Chinese semiconductor industry growth: advancing rapidly in system design and integration even while fabrication technology continues to catch up. RAND’s Jimmy Goodrich has observed that China would likely need at least an additional $1 trillion to achieve true self-sufficiency in semiconductors.
From restriction to resilience
China’s procurement limits on Nvidia chips mark a strategic turn. Cutting reliance on the global leader signals confidence in domestic alternatives, not retreat. By leaning into Huawei clusters and similar platforms, Beijing reframes restrictions as steps toward independence.
This fits a broader vision of China’s tech sovereignty, ensuring that AI, high-performance computing, and national security systems can advance without dependence on foreign suppliers. For the rest of the world, the implications are significant. As China accelerates toward self-reliance, the balance of global innovation will shift. Resilience, if sustained, can evolve into influence.
The U.S. and the Struggle for Global Technology Leadership
For the United States, semiconductors are both a strategic necessity and a test of credibility in the global technology leadership race. Progress has been uneven, and the gap with competitors remains wide.
The CHIPS Act and slow progress
In 2022, Washington passed the CHIPS and Science Act, authorizing $280 billion in new funding for science and technology and appropriating $52.7 billion specifically for semiconductor manufacturing and research. The program is designed to incentivize fabrication, expand research, and train a skilled workforce. The vision is ambitious, but execution has been slow.
The Arizona fab and its challenges
The TSMC project in Arizona has become a test case for U.S. semiconductor ambitions. In 2023 the company postponed the start of production to 2025, citing a shortage of skilled workers and the need to fly in technicians from Taiwan. By January 2025, the facility began producing 4-nanometer chips, a milestone that underscored both progress and the steep challenges of replicating Taiwan’s ecosystem in the United States.
The lesson from Arizona is straightforward. Equipment and capital matter. Skilled people, mature supply chains, and institutional know-how matter more.
The cost of dependence
The United States still depends heavily on Taiwan for advanced semiconductors. This reliance carries both economic and security risks. A disruption in Taiwan, whether through conflict, coercion, or natural disaster, would immediately hit consumer electronics, cloud computing, defense systems, and AI research.
Dependence also limits strategic freedom. Taiwan’s security is now inseparable from America’s own resilience, binding U.S. policy ever more tightly to the island’s fate.
Global technology leadership at stake
Semiconductors are shaping who leads in innovation, who defines the standards of artificial intelligence, and who secures the digital economy. For the United States, maintaining global technology leadership requires more than domestic investment. It demands a coherent U.S. semiconductor strategy that unites funding, workforce development, supply chain resilience, and alliances. Without this, momentum will continue to slip and strategic impact will erode.
The Case for Awakened Global Governance
The struggle over semiconductors cannot be managed through rivalry alone. Strategies built on domination deepen instability and risk undermining the very systems they seek to secure. Awakened global governance offers a different path: one grounded in resilience, clarity, and the long-term security of societies.
Awakening leadership beyond rivalry
The current race is framed as a contest for control. What is needed is leadership that sees beyond control and acts with responsibility. Awakened leadership in geopolitics recognizes semiconductors as the nervous system of global civilization, not merely commercial assets.
Through awakened diplomacy in technology, nations can shift the dialogue. The central issue is no longer who dominates supply, but how to construct an ecosystem that strengthens peace while sustaining innovation. Leadership for peace and resilience turns attention from zero-sum competition toward shared stability.
Toward a resilient semiconductor ecosystem
Resilience requires diversification of production. Fabs must operate across multiple regions so that no single disruption, political, economic, or natural, can fracture global supply. Alliances should evolve into cooperative frameworks where capacity, research, and governance are shared. Awakened AI governance intersects with this work: the way chips are manufactured will determine how intelligence itself is governed. What lies ahead requires foresight over profit-first instincts and a renewed focus on human values in the competition for technology.
Conclusion: Navigating the Faultline of Semiconductor Geopolitics
Semiconductor geopolitics has become the defining arena of twenty-first century power. Taiwan’s dominance in advanced manufacturing, China’s accelerating drive for self-sufficiency, and America’s struggle to rebuild capacity form the core of a new global faultline. The stakes extend far beyond economics. They reach into the foundations of security, innovation, and the governance of artificial intelligence (AI).
A single disruption in Taiwan would ripple through every supply chain, unsettle economies, and slow the advance of artificial intelligence. The stakes are no longer technical alone; they define how societies prepare for risk, manage conflict, and govern the technologies that carry civilization forward.
This is a moment that calls for leadership with clarity and depth. As the Global Pioneer of Awakened Leadership, my work is dedicated to building a movement that restores purpose to power and resilience to governance. Awakened governance, awakened AI governance, and awakened diplomacy are central to this vision, forming a framework that unites technology with human values.
This reflection is part of the broader Awakened Leadership Movement, a call for global leadership awakening at a time when the future of humanity and technology are inseparable. To explore this vision more deeply, I invite readers to engage with the Awakened Leadership Constitution, Charter, and Manifesto, which lay out the foundation for a new era of leadership.
The struggle for semiconductors is a signal of larger choices before us. The future will be shaped not only by the chips we produce but by the leadership we embody. It is time for leadership and governance to awaken and bring clarity to the century ahead.
