Silicon Valley’s Wake‑Up Call: Why Apple and Others Are Rethinking Taiwan

Apple’s chief, Tim Cook, was one of a small group of tech leaders who got an inside look at the CIA’s fear that China might try to take Taiwan by 2027. The meeting, held in a secure room near Silicon Valley in July 2023, was set up because the U. S. commerce secretary at the time wanted the industry to stop putting all its chips in Taiwan. CIA heads William Burns and Avril Haines shared their latest intel with Cook, Nvidia’s Jensen Huang, AMD’s Lisa Su, and Qualcomm’s Cristiano Amon. Afterward Cook admitted he could not sleep well. A similar secret session had taken place at the White House in 2021, but many executives left unsure because most of the info was already public. That year a top U. S. military officer told Congress that President Xi Jinping wanted the Chinese army ready to seize Taiwan by 2027. National security adviser Jake Sullivan said that dependence on Taiwanese chips was a major U. S. weakness and urged the tech sector to help build more American factories, leading to a $50 billion subsidy package in the CHIPS and Science Act of 2022.The investigation shows how much Silicon Valley relies on Taiwan Semiconductor Manufacturing Company, which makes about 90 % of the world’s most advanced chips. A confidential 2022 report warned that losing Taiwan’s supply would trigger a crisis worse than the Great Depression, dropping U. S. GDP by 11 %. A Bloomberg report in January 2024 estimated a conflict would cost the global economy over $10 trillion. Despite the danger, companies like Apple were slow to buy pricier U. S. chips because they cost more than 25 % higher due to materials, labor and permitting. U. S. plants also lag a generation behind Taiwan’s technology. Apple began changing course after Cook visited the Oval Office last summer, pledging $100 billion to U. S. manufacturing and starting daily engineering talks with Intel about production options. TSMC is now investing roughly $165 billion in the U. S. , adding five new plants in Phoenix. Its Arizona facility recently produced Nvidia’s first AI chip made in America, though the chip still needs advanced packaging shipped back to Taiwan. The Taiwanese government has an unofficial “silicon shield” policy that keeps the most advanced tech on the island to deter attacks, but Russia’s invasion of Ukraine shows economic ties don’t always stop war. TSMC’s CFO said its top processes will stay in Taiwan for the foreseeable future.