From Minerals To Microchips: What Taiwan Can Learn From Ukraine – Analysis

 July 19, 2025

By Geopolitical Monitor

By Yen-ting Lin

In May 2025, Ukraine signed a $60 billion critical minerals agreement with the United States—an investment framework celebrated as a landmark in bilateral cooperation. Yet, this deal was forged only after two years of war, a 29% GDP contraction, and the loss of industrial territories holding over 30% of the world’s titanium and rare earths. Long recognized for their importance in aerospace, defense, and clean energy, these resources became bargaining assets only after immense national sacrifice and the failure of deterrence.

Taiwan, meanwhile, occupies a pivotal role in the global semiconductor supply chain, producing over 90% of the world’s advanced chips under 10 nanometers and contributing more than $70 billion annually through firms like TSMC, MediaTek, and UMC. These semiconductors power artificial intelligence, precision weapons, and cutting-edge computing. Yet Taiwan faces mounting pressure from the People’s Republic of China, whose military doctrineincreasingly signals 2027 as a potential flashpoint for unification by force.

Despite over $50 billion in Taiwanese-led investments in the United States, Japan, and Germany—spanning fabs from Arizona to Dresden—Taiwan remains outside formal military alliances like NATO and without a bilateral defense treaty. The Taiwan Relations Act provides strategic ambiguity but no explicit defense guarantee, leaving the island vulnerable to coercion.

This juxtaposition raises urgent questions: How can Taiwan ensure its semiconductor dominance translates into binding security guarantees? What lessons can it draw from Ukraine’s reactive resource diplomacy to avoid similar costs? And how can Taiwan’s strategic interdependence with the United States and its allies be leveraged to deter aggression without eroding its “silicon shield”?

Comparative Strategic Leverage: Taiwan and Ukraine

Taiwan and Ukraine, despite their geographic and cultural differences, share a critical similarity: control over globally indispensable resources. Taiwan dominates the production of advanced semiconductors. Ukraine, by contrast, holds approximately 30% of the world’s titanium reserves and 20% of rare earth deposits—essential for clean energy, aerospace, and military applications. However, the geopolitical contexts in which these nations operate diverge sharply.

Ukraine leverages its status as a UN member and European Union candidate to secure support through frameworks like the IMF and NATO’s Partnership for Peace. Taiwan, by contrast, is diplomatically recognized by only 11 nations and excluded from multilateral institutions, operating in near-total isolation. Its security rests on economic indispensability and strategic partnerships, particularly with the United States.

Ukraine’s experience underscores Taiwan’s vulnerabilities. Only after a 29% GDP contraction and the loss of key industrial territories did Ukraine secure a $60 billion minerals deal with the U.S. and sustained military aid from NATO-aligned countries. Taiwan, however, faces the immediate threat of a 2,000-missile barrage from the PLA, capable of disabling critical semiconductor fabs in under 21 minutes and severing global chip supply chains. Unlike Ukraine’s extractive resources, which can be relocated or exploited over time, Taiwan’s semiconductor production relies on irreplaceable Dutch ASML lithography machines and a highly specialized workforce, making it uniquely vulnerable to disruption.

Adding complexity is Taiwan’s economic interdependence with China. In 2024, 35% of Taiwan’s semiconductor revenue came from Chinese clients, creating a precarious duality of strength and vulnerability. In contrast, Ukraine’s integration with European markets aligns seamlessly with its Western geopolitical trajectory. Taiwan’s exclusion from institutional frameworks such as the IMF and NATO deepens its isolation and limits its ability to secure international support in a crisis.

While Ukraine benefits from symbolic gestures, such as the Pope’s prayers and alignment with Western narratives, Taiwan must rely on its economic contributions and technological indispensability. Its $165 billion in overseas semiconductor investments, aimed at embedding the island in allied economies, risks becoming sunk costs without binding security guarantees. The lessons from Ukraine are clear: reliance on reactive diplomacy risks devastation. Taiwan must act preemptively to translate its semiconductor dominance into binding alliances, institutional guarantees, and strengthened readiness.

US-Taiwan Relations: Semiconductor Leverage and the Risk of Strategic Overexpectation

Taiwan’s relationship with the United States is central to its security and survival but rests on fragile verbal assurances rather than binding commitments. The Taiwan Relations Act offers strategic ambiguity, not explicit guarantees, leaving Taiwan dependent on promises that lack enforceable clarity. This dependence has fostered what scholars term “overexpectation”—the belief that economic interdependence and arms sales ensure US intervention in a crisis. In reality, without formal treaties or security compacts, Taiwan’s defense relies more on hope than certainty.

The U.S. supplies nearly all of Taiwan’s advanced weaponry, but this dependency exposes systemic vulnerabilities. Delayed deliveries and maintenance backlogs of critical systems, including Stinger missiles and F-16 fighters, limitTaiwan’s ability to deter or withstand a major assault. Unlike US allies with diversified procurement options, Taiwan’s exclusion from international alliances exacerbates this reliance, leaving it unable to access alternative defense suppliers.

Taiwan’s mutual-billion in semiconductor investments in Arizona, Kumamoto, and Dresden aim to strengthen economic ties, but they also present a strategic dilemma. Offshoring production risks weakening Taiwan’s “silicon shield” — the strategic indispensability that ties its survival to global supply chains. At the same time, retaining most production on the island frustrates allies seeking risk diversification. This paradox underscores Taiwan’s precarious balance: its indispensability sustains its relevance, but over-dependence on US support threatens its leverage.

The semiconductor industry also highlights Taiwan’s central role in a fragile global ecosystem. Advanced chip production depends on irreplaceable Dutch ASML lithography machines, Japanese photoresists, and Taiwan’s highly specialized workforce—none of which can be quickly replicated elsewhere. A PLA blockade could cost the global economy $1.6 trillion within six months, yet US commitments remain cautious, falling short of the formal guarantees Taiwan needs.

Taiwan’s experience with the United States reveals a painful reality: verbal assurances and economic interdependence are no substitute for formalized security. To avoid the pitfalls of overexpectation, Taiwan must demand stronger alignment between its economic investments and defense commitments while safeguarding its semiconductor leverage. Binding bilateral agreements, enhanced military resilience, and recalibrated expectations are essential to navigating the harsh realities of strategic ambiguity.

From Delay to Deterrence: Strategic Imperatives for Taiwan’s Survival

Taiwan’s semiconductor industry is its greatest strategic asset, but this indispensability has not yet translated into tangible security guarantees. Chinese military doctrine points to 2027 as a critical decision point for potential unification by force, underscoring the urgency for Taiwan to act decisively and transform its semiconductor dominance into a durable strategic advantage.

First, Taiwan must reframe its mutual-billion in TSMC-led overseas investments in Arizona, Kumamoto, and Dresden as geopolitical collateral. These fabs should be formalized as “chip embassies” embedded in allied territories, triggering automatic responses under threat scenarios. Such institutionalization strengthens alliances and aligns Taiwan’s survival with the interests of its partners, ensuring that its contributions are more than economic.

Second, Taiwan must amplify its global stakes by highlighting the catastrophic consequences of a disruption in chip production. Outreach to governments and corporations should emphasize that a blockade could cost the global economy $1.6 trillion within six months, underscoring Taiwan’s irreplaceable role. This approach can drive international commitment to Taiwan’s security through economic interdependence.

Third, Taiwan should leverage its semiconductor expertise to engage with non-state actors like global corporations and research institutions. Collaborations with entities in Japan, the Netherlands, and the United States—particularly in areas like advanced lithography and production diversification—enhance Taiwan’s technological edge while reinforcing its position as a critical player in the semiconductor ecosystem.

Finally, Taiwan must maximize its participation in international coalitions where statehood is not a requirement. As a leader in semiconductor innovation, Taiwan can position itself as an essential actor in technical standard-setting bodies and industry-specific alliances. This strategy enhances Taiwan’s visibility and influence while sidestepping its exclusion from formal international organizations.

Taiwan’s assumption that its indispensability will automatically trigger allied intervention is a dangerous overestimation. By constructing a strategic architecture of non-state engagement, geopolitical investments, and chip diplomacy, Taiwan can secure its survival without overreliance on verbal assurances. Waiting for a crisis to act risks negotiating from weakness, not strength.

Is Taiwan Ready?

Taiwan’s dominance in semiconductors secures its role as an economic powerhouse, but strategic assets alone will not guarantee survival. Overreliance on the United States and the misplaced belief that indispensability ensures intervention remain Taiwan’s most dangerous vulnerabilities. This is not a time for complacency.

Taiwan cannot afford to wait for a crisis to reveal the fragility of its assumptions. Unlike Ukraine, which leveraged international frameworks and deep territorial resilience, Taiwan stands as an isolated, self-governed island. It lacks the depth, alliances, and multilateral protections necessary to mobilize or endure prolonged conflict.

The reality is stark: Taiwan has time to act, but not to hesitate. It must build treaty-bound guarantees, fortify its domestic resilience, and leverage its indispensability into binding commitments from allies. Without these actions, Taiwan risks facing its defining crisis alone.

The world depends on Taiwan’s semiconductors, but Taiwan’s survival must depend on more than faith in external intervention. The real challenge is not proving Taiwan’s importance to the world—it is ensuring that importance translates into security before the window closes.

• The views expressed in this article belong to the author(s) alone and do not necessarily reflect those of Geopoliticalmonitor.com.

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