4th Sep 2025
The Taiwan Strait isn’t just a geopolitical flashpoint; it’s a critical artery for the global electronics industry. Rising tensions between China and Taiwan pose a significant threat to the intricate network of supply chains that underpin the industry, according to this special report by the Center for Strategic and International Studies (CSIS).
SOURCE: Astute Group Newsletter
Taiwan’s dominance in semiconductor manufacturing is over 90% of the world’s most advanced chips, vital for everything from smartphones and data centres to advanced military equipment, Taiwan is a crucial link in the electronics supply chain. Any disruption to this flow of chips would most definitely have a cascading effects, causing production delays, escalating costs, and hindering innovation across the globe.
The Taiwan Strait isn’t just semiconductors. It’s a major shipping route for a vast array of electronic components, raw materials and OEM product. Any disruptions, whether due to local military conflict or a less kinetic measure like a quarantine, would certainly reduce logistics within the Strait’s, leading to delays, higher shipping costs, and potential shortages of essential components.
Key players in the electronics industry, particularly in South Korea and Japan, are heavily reliant on the Taiwan Strait. South Korea depends on it for 30% of its imports and 23% of its exports, amounting to $357 billion. Disruptions could force production cuts, delay product launches, and ultimately drive-up costs for consumers globally.
Any impact doesn’t stop there but extends way beyond the immediate region. The message is clear: a stable and secure Taiwan Strait is not just a matter of geopolitics; it’s essential for the health and future of the global electronics industry.
