Taiwan to up defense spending and develop Iron Dome-inspired missile protection — expert warns one well-placed Chinese missile could make it 'impossible to get a new iPhone for three years'

As Taiwan ups defense spending and invests in air defenses to fend of possible missile attacks as part of a foreign invasion, a researcher from the Taiwan National Science and Technology Council (NSTC) Hsinchu Science Park Bureau suggested that a single missile strike targeting the Hsinchu Science Park would have catastrophic effects worldwide, resulting in a 6% to 10% drop in global GDP and halting iPhone production for several years. According to Nikkei Asia, Taiwan’s Silicon Valley houses more than 600 tech companies and research bodies, with Taiwan Semiconductor Manufacturing Company (TSMC), the largest chip foundry in the world, operating six major fabs in the area.

“If even one missile from China hits a key manufacturing center in Hsinchu, it would probably be impossible to get a new iPhone for three years,” said NSTC Associate Researcher Scott Huang. This was further corroborated by Lien Hsien-ming, the president of the Taiwanese think tank Chung-Hua Institution for Economic Research, who suggested a global GDP drop of around 6% to 10% because of the disruption in semiconductor production. “Conditions would be catastrophic,” says Lien.

China has always been vocal about its goal of reunifying Taiwan with the mainland, with Beijing saying that it’s willing to use force if necessary. The U.S. intelligence community assesses that the CCP would have the military capability to conduct an invasion of its neighbor by 2027, although this does not mean that it would do so at that time. However, any attack or instability would have a wide-ranging impact on the global semiconductor supply.

Although the U.S. is working hard to reshore chip production, with TSMC making moves to accelerate production of its latest nodes in Arizona, it’s estimated to take at least 20 years before it achieves independence from Taiwan and China. Beijing is also pushing for “semiconductor sovereignty”, with the CCP claiming that its homegrown AI processors could compete against China-only Nvidia H20 and RTX Pro 600D AI chips.

Taiwan is still relying on its “silicon shield” to protect it from invasion, despite moves by the two rivals to build the latest, most powerful chips within their borders. However, the Taiwanese government recognizes this might not be enough, especially if Beijing decides to just destroy TSMC instead of capturing it whole. That’s why the government of Taiwanese President Lai Ching-te plans to increase the island’s defense spending to 5% of its GDP and develop T-dome, an air defense system inspired by Israel’s Iron Dome, and help protect it from airborne threats, including aircraft, drones, missiles, and hypersonic weapons.

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