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Taiwan's Earthquake Response Showcases Its Competence

Time and again, the Republic of China has shown a capacity to adapt in the face of fresh challenges. 

7.5 Magnitude Earthquake Hits Taiwan

The earthquake that rattled Taiwan on Wednesday has had its share of viral moments, with buildings tipping over, freeways shaking, and water being violently shaken out of swimming pools. With such jarring scenes, it’s probably no surprise that lives were lost and significant damage done. 

But in noting the 13 deaths (so far), 1,100 injured, and tens of millions of dollars in damage, we should recognize that it could have been much worse. Taiwan has a history of earthquakes—more than 100 with a magnitude of 5.5 or greater since 1980, in fact—although this was the worst since 1999, when the 7.7 Jiji earthquake killed more than 2,000 people. Just since that cataclysm they have adapted, with a comprehensive update to their building codes, and with emergency response teams well-prepared to respond to quakes in an urban setting. Thus, even though hundreds remain trapped or stranded as of this writing, the death toll will be considerably smaller than 1999’s despite its similar strength, 7.5. 


Resilience is the story of Taiwan’s people since the end of the Second World War, adapting to the threat of invasion from Communist China at the end of the Chinese Civil War via an industrial policy that secured rapid growth rates; to the loss of diplomatic recognition from much of the world through increased openness—including to a then-reforming PRC—and to an increasingly connected world, reliant on distance-spanning technology, by making itself indispensable in one especially crucial sector: semiconductors. 

Through careful advanced planning, technological expertise, and the dedication of their technicians, Taiwan has since the dawn of the millennium emerged as the location where much of the world’s semiconductors are fabricated; it accounts for nearly half of total global foundry capacity as of 2023, and much of that comes just from the Taiwan Semiconductor Manufacturing Company (TSMC). Now, however, much of the rest of the world is starting to look at this dependence and ask whether it can be sustained. 

For, while the PRC has its reasons why it has not launched an invasion of Taiwan to reclaim the “rogue province” that has been governing itself since the end of the Chinese Civil War, most defense analysts do not believe disruption of the semiconductor supply chain would be one of them. Rather, it would be the inherent riskiness of the operation, the condemnation of much of the world, and the belief that, as a civilization spanning millennia, time is on China’s side. 

Should those views change, and a mission launched to retake the island, Beijing would consider the disruption of the semiconductor supply chain an acceptable development. 

That’s one reason why there has been increased interest in much of the world in diversifying the supply chain outside of Taiwan, including the U.S. states of Arizona and Texas. As I and my co-author, Akhil Ramesh, noted in our series on supply chain security published last year, friend-shoring is an increasingly hot topic largely because policymakers are waking up to the reality that China has seized a foothold in many crucial industries while the rest of the world’s attention was elsewhere—or had convinced itself that the PRC having such advantages would not be an issue. 


Sadly, many countries in the past decade-plus have discovered that China has not only built up such advantages, but in bilateral disputes is not shy about using them

The only sector in our four-part series where China does not hold such advantages is, in fact, semiconductors, and this is largely because of Taiwan’s successes (and, to a lesser extent, South Korea’s) but also China’s failures at getting its own industrial policy off the ground in this field. However, given the Taiwan Strait’s status as a potential flashpoint, diversification has been touted by those who need Taiwan’s semiconductors. Even within Taiwan, President-elect William Lai Ching-te has embraced the idea of TSMC growing outside the island—including to the U.S. 

During the rollout of the paper series Ramesh and I authored, we did receive one unexpected piece of pushback: That we should not encourage industry to leave Taiwan. In the face of growing PRC assertiveness in the region, from building new bases abroad, installing suspicious development projects in other countries, and turning territorial disagreements into violent ones, Taiwan’s refusal to be cowed in the face of China’s threats, they argue, is of symbolic importance, as well as strategic: Were China to retake Taiwan successfully, or to browbeat it into submission by strangling its trade and international diplomatic recognition, its ambitions would likely not stop there. 

All of which could be true, and still not a decisive refutation of the need for greater diversification of the semiconductor supply chain. During the global pandemic disruptions hit the global supply chain; this earthquake may as well, even if it turns out to be smaller: More than $60 million in damage was reported to TSMC facilities on the island, even though they were back at near 80% capacity within a day. 

Encouraging diversification away from Taiwan need not be a death knell for the island’s economy: The Taiwanese have proven their resiliency before and can do so again if they know their economy is not going to be responsible for the majority of the world’s fabrication. In fact, there have been calls for years for them to do just that

But resilience is not just for Taiwan: Bringing more production of semiconductors (and other hi-tech) to America’s shores is the next step in proofing them against geopolitical concerns—and minimizing future shocks to the US economy.