Indefensible
Taiwan through the lens of energy.
“I came through and I shall return.” – Douglas MacArthur
Those seven words, spoken by US General Douglas MacArthur in Melbourne, Australia, on March 21, 1942, would go on to have a profound impact on world history. Having been ordered to evacuate the Philippines, MacArthur undoubtedly felt some lament abandoning his troops just as Japan took victory over US forces there, especially in light of the infamous Bataan Death March that ensued in the following weeks. His dash off the island in a PT boat didn’t sit right with many of those under his command who saw in him a bombastic leader who betrayed them. MacArthur’s vow to return was inevitably woven into US military decision-making, causing some to wonder whether personal interests were being prioritized.
With the war in the Pacific in firmer allied control and the Pentagon contemplating the fastest way to defeat Japan, many argued the US should invade Formosa, a large island off the coast of China that had been a Japanese colonial possession since 1895. Codenamed Operation Causeway, the proposed invasion was designed to hinder the island’s utility to Japanese naval logistics. MacArthur vigorously opposed this strategy, insisting that the Philippines should be prioritized, after which the islands of Iwo Jima and Okinawa could be targeted. The general got his way, and Okinawa became home to the largest US military base in the Asia-Pacific region after the war.
In line with the Potsdam Declaration, Formosa was returned to the Republic of China in 1945, after which it became better known as Taiwan. When the communists won the Chinese Civil War in 1949, the country’s former leader Chiang Kai-shek escaped to Taiwan and set up what amounted to a government in exile. In the ensuing 75 years, tensions over whether, when, and how Taiwan should be reintegrated with the mainland have simmered, and the Chinese Communist Party has made unification its top foreign policy objective.
Chiang ruled Taiwan as a dictatorship until his death in 1975, and martial law did not end until 1987. This marked the beginning of Taiwan’s transition from an authoritarian state to a democracy. It was also the year Taiwan Semiconductor Manufacturing Company (TSMC) was founded, a byproduct of decades of strategic investment in high technology by the Taiwanese government. The company pioneered the foundry business model in which it focused on producing chips using the designs of others, effectively becoming the contract manufacturer of choice for most of the industry. Today, Taiwan produces approximately two-thirds of the world’s semiconductors and some 90% of the most advanced ones.
Taiwan’s technology success story has made the island indispensable as a semiconductor superpower, giving rise to a concentrated risk that could spread repercussions across the global economy. Semiconductors and other high technologies consume an enormous amount of high-quality electricity, making Taiwan’s energy policy an urgent matter for the world. On that front, things have been looking a little shaky lately:
“Taiwan, the world’s semiconductor powerhouse, is facing a power crunch — and this could spell trouble for chipmakers. Manufacturing chips requires a lot of energy and electricity, and the government is struggling to meet the island’s energy needs…
There were three major outages in Taiwan in the past seven years, and the island has experienced a slew of smaller disruptions in the past year. As recently as April, in Northern Taiwan alone, multiple power shortages were recorded over three days, according to local reports. In 2022, there were 313 power outage incidents. A big power outage that year affected more than 5 million households, while another massive blackout in 2017 hit almost 7 million households.”
Just how bad is Taiwan’s energy situation and how did it put itself in such a vulnerable position? How might China exploit this situation if hostilities break out? The numbers might come as a bit of a shock. Let’s take a look.