The Evolution Of Taiwan’s Silicon Shield

The original Silicon Shield theory, as described in my 2001 book, stated that Taiwan’s role as producer of 90 per cent of the world’s IT products (at that time) protected it from an attack by China because the United States, acting in its own self interest, would come to the island’s defense. A similar scenario – involving oil, not electronics – occurred in 1990 when the US intervened after Iraq invaded Kuwait.

Fast forward a decade after the book, and much of Taiwan’s electronics production, including laptops and mobile phones, had moved to China – although it was still controlled by Taiwanese-owned companies like Compal, Foxconn and Quanta. (The transfer of Taiwanese chip technology to China was restricted, and still is).

The 2009 Silicon Shield documentary reflected this shift by arguing that China would refrain from attacking Taiwan because of the harm it would inflict upon itself. In other words, a Cold War-style mutually assured destruction (MAD) scenario would keep the peace.

So what is the Silicon Shield today?

Both of the above still apply in their own way, but some pundits now believe the Silicon Shield may even increase the risk of Taiwan being forcibly taken by China. The “Broken Nest” theory states that Taiwan should adopt a scorched earth policy and destroy TSMC et al in the event of an attack, thus reducing the island’s value to the invaders.

While the Broken Nest has its fair share of critics, a similar scenario was foreshadowed by one of the people interviewed for the 2009 documentary. Chih-Yuan Lu, former head of Taiwan’s Submicron Project and since then president of Macronix International, said Taiwan’s semiconductor industry could be compared to jade, the precious mineral valued by the Chinese.

“If you have valuable jade in your pocket and you cannot defend yourself, there are many robbers who will target you,” Lu said at the time. In the case of two parties fighting over ownership, “at the last moment they even want to break the jade” to prevent the other from having it, he explained.

Since the outbreak of the pandemic, semiconductors have been elevated from relative obscurity to an industry of keen interest to mainstream media and the general public. The same goes for Taiwan and its role in the hi-tech supply chain. These developments motivated me to revive the original Silicon Shield documentary for a new audience.

The result is “Silicon Shield 2025” – the year being a reference to the date Taiwan’s defense minister believes China will have the ability to invade. The new version, available for streaming on Vimeo On Demand, uses the same voice-over narration and video interviews from the 2009 production, but the content has been digitally remastered and updated with HD b-roll footage as well as new material to reflect recent events. Indeed, it is remarkable how much of the original documentary narrative from 13 years ago is relevant today, perhaps more so.

SemiWiki members choosing the “rent” option on Vimeo On Demand can watch “Silicon Shield 2025” free of charge by using the promo code CHIPS, which is valid until July 25.

In addition, be sure to check out The Chip Warriors podcast – the most recent episode being on Taiwan’s Chip Warriors, featuring the above mentioned C.Y. Lu, as well as legends like TSMC founder Morris Chang.

For those interested in how Taiwan got into this situation in the first place – caught between two superpowers – check out the Nixon’s China Choice podcast. Nothing about semiconductors here, but it is a fascinating look into the minds of Nixon, Kissinger and Halderman as they sought rapprochement with Communist China while trying not to sacrifice Taiwan in the process. Nixon failed in the latter, but that set back – along with the loss of US diplomatic recognition under Carter in 1979 – provided the impetus for Taiwan’s leaders to take the enormous risk of betting their national survival on semiconductors.