Why Taiwan Matters More Than Ever

One of my favorite companies in the world is TSMC.

I have seen countless videos on X of Jensen Huang walking through Taiwan, surrounded by crowds, signing autographs, and going on food adventures like a hometown hero. Those clips are fun to watch, but they also say something bigger. Taiwan is not just another stop on the global tech map. It is one of the centers of the AI revolution.

Every time I read about NVIDIA, OpenAI, Anthropic, or Google pushing AI forward, I eventually find myself back at the same place: Taiwan. TSMC manufactures many of the most advanced chips that make modern AI possible. Without TSMC, the AI boom would look very different.

That is why I was interested in Defending Taiwan: A Strategy to Prevent War with China by Eyck Freymann.

The book argues that Taiwan matters for reasons far beyond semiconductors. It is not just a “chip story.” Taiwan sits in a crucial strategic position in the Pacific, and its future is tied to the larger rivalry between the United States and China.

Still, the semiconductor angle is impossible to ignore. The world depends heavily on Taiwan for advanced chips. If Taiwan were blockaded or attacked, the impact would not just hit tech companies. It would ripple through markets, supply chains, defense systems, and the entire global economy.

That risk is real enough that even Warren Buffett noticed it. Berkshire Hathaway bought a large stake in TSMC in 2022, then quickly sold most of it. Buffett later said geopolitical tensions were one reason for the sale. To me, that is what makes TSMC so fascinating. It may be one of the best businesses in the world, but it also carries one of the most obvious geopolitical risks.

A Taiwan crisis may not begin with a full invasion. Freymann discusses gray-zone tactics, blockades, information warfare, and pressure campaigns that could isolate Taiwan without immediately triggering a clear military response. That kind of slow-moving conflict may be harder to understand, but it could still be extremely damaging.

As investors, it is easy to focus only on business quality. TSMC has incredible technology, scale, and importance to the global economy. But studying the company also means studying Taiwan itself.

The AI revolution has made companies like NVIDIA household names among investors. But behind the AI hype is a much deeper supply chain. TSMC is one of the quiet foundations holding it all together.

That is what makes Taiwan so important. It is a small island, but its role in technology, trade, and geopolitics is enormous. The future of AI may depend not only on software breakthroughs or new models, but also on whether the world can keep the Taiwan Strait stable.