📊Executive Summary

Taiwan's heavy reliance on its semiconductor industry, particularly TSMC, poses significant geopolitical risks. The island's economy is highly dependent on semiconductor exports, which account for 40% of its total exports. This dependence makes Taiwan vulnerable to external shocks, especially given the ongoing tensions with China, its largest buyer. The rise of AI chips presents both opportunities and challenges, as smaller domestic firms may struggle to compete. Additionally, cyber threats, exemplified by a ransomware attack on Foxsemicon, highlight the sector's vulnerabilities. The article emphasizes the need for Taiwan to diversify its economy to mitigate risks associated with over-reliance on a single sector....