Taiwan’s Strategy for Promoting Democratic Values to Partner Countries: TSMC as a Silicon Shield
DOI:
https://doi.org/10.61476/tde9zn62Keywords:
Taiwan, Functional Recognition, Silicon Shield, Democratic Values, Niche DiplomacyAbstract
Amidst the intensification of systematic diplomatic isolation and the erosion of its formal de jure status, Taiwan faces significant challenges in maintaining its international relevance. This study aims to analyse Taiwan’s pragmatic strategies for the 2024–2025 period, focusing on the transition from reliance on formal recognition towards the strengthening of functional (de facto) recognition. By applying the concept of niche diplomacy as an analytical tool, this study maps the transformation of state behaviour into routine and diffuse institutional dimensions. Employing a descriptive qualitative approach through document analysis, this study integrates data from official government documents, TSMC strategic reports, and international media releases. The findings indicate that the erosion of formal status has by no means weakened Taiwan’s international influence. On the contrary, dominance in advanced chip manufacturing through the ‘Silicon Shield’ mechanism has created deep structural dependencies within the global economy, whilst its democratic identity has successfully forged strong normative alliances with Western nations. Ultimately, functional capacity has proven to be a highly effective diplomatic substitute. This study demonstrates that an actor’s relevance and resilience in the contemporary era are determined more by its crucial role in global supply chains and the world’s normative order than by mere formal institutional recognition.
References
Blanchard, B., & Hung, F. (2025, March 31). TSMC affirms commitment to Taiwan with new domestic fab amid overseas expansion. Reuters. https://www.reuters.com/technology/tsmc-affirms-commitment-taiwan-with-new-domestic-fab-amid-overseas-expansion-2025-03-31/
Cooper, A. F. (1997). Niche Diplomacy Middle Powers after the Cold War.
Farrell, H., & Newman, A. L. (2019). Weaponized Interdependence: How Global Economic Networks Shape State Coercion. International Security, 44(1), 42–79. https://doi.org/10.2469/cp.v29.n3.2
Full text of President Lai’s 2026 New Year Day’s address . (2026, January 1). Focus Taiwan. https://focustaiwan.tw/politics/202601010008
Gardner, S. C., Khrestin, I., Aliu, A., Bock, J., Parilla, H., Sang, H. T., & Levine, B. (2024). The TAIPEI Act: Origins, Tools, Results, and Remedies. In Global Taiwan Brief (Vol. 9). http://globaltaiwan.org/sub-
Grieger, G. (2024). EU-Taiwan ties after Taiwan’s 2024 elections. March. https://www.europarl.europa.eu/RegData/etudes/ATAG/2024/760357/EPRS_ATA(2024)760357_EN.pdf
Hall, S., & Liebenberg, L. (2024). Qualitative Description as an Introductory Method to Qualitative Research for Master’s-Level Students and Research Trainees. In International Journal of Qualitative Methods (Vol. 23). SAGE Publications Inc. https://doi.org/10.1177/16094069241242264
Hilpert, H. G., Sakaki, A., & Wacker, G. (2022). SWP Research Paper Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Dealing with Taiwan. SWP Research Paper, 9(September).
Him, C. H., & Tang, D. (2026, January 16). Taiwan’s tech companies to invest $250B in US under new trade deal. AP News. https://apnews.com/article/semiconductors-chips-tsmc-taiwan-trump-china-95de4082d5e36a3c0a0b00f613a5df39
Hunnicutt, T., Blanchard, B., & Lee, Y. (2025). Exclusive: Trump team wants Taiwan to train US chip plant workers, sources say. Reuters. https://www.reuters.com/world/asia-pacific/trump-team-negotiating-trade-deal-with-taiwan-that-could-help-train-us-workers-2025-11-26/
Ito, S. (2026). Will Taiwan’s “Silicon Shield” Hold? The U.S. - Taiwan deal and a New Phase in Economic Security Competition. DCER, 2026(July 2025). https://dcer.dentsusoken.com/en/reports/shi26002/
Kochumon, J., & C.A, J. (2025). Taiwan’s Silicon Shield Balancer in the Taiwan-US-China Triangularity. East Asia, 43(1), 23–36. https://doi.org/10.1007/s12140-025-09455-1
Lee, L., & Baptista, E. (2025, May 14). Two Taiwan allies attend Beijing forum as China steps up diplomatic pressure. Reuters. https://www.reuters.com/world/two-taiwan-allies-attend-beijing-forum-china-steps-up-diplomatic-pressure-2025-05-13/
Lee, Y., & Blanchard, B. (2024, March 1). Taiwan faces steady “drip” of pressure as China tightens pre-inauguration squeeze. Reuters. https://www.reuters.com/world/asia-pacific/taiwan-faces-steady-drip-pressure-china-tightens-pre-inauguration-squeeze-2024-03-01/
Lin, S. H. Y., Fu, R. T. M., & Chang-Liao, N. C. (2026). Chips and democracy: Analysing American support for military interventions. British Journal of Politics and International Relations, 28(1), 210–234. https://doi.org/10.1177/13691481251355069
Liu, R. C., Tang, H. wei, Kao, Y., & Chou, Y. (2025). From vulnerabilities to resilience: Taiwan’s semiconductor industry and geopolitical challenges. Telecommunications Policy, 49(4), 102951. https://doi.org/10.1016/j.telpol.2025.102951
Mehmet Topal. (2024). Semiconductor Dominance and Western Dependence: Geopolitical Risks From Taiwan and China. International Education and Research Journal, 10(9), 23–26. https://doi.org/10.21276/ierj24089167890780
Miller, C. (2022). CHIP WAR: The Fight for World’s Most Critical Technology.
Miskimmon, A., O’Loughlin, B., Roselle, L., Liao, N., Singh, J. P., Brown, R., Arsenault, A., Hong, S., Price, M. E., & Archetti, C. (2018). Forging the world: Strategic Narratives and International Relations. In A. Miskimmon, B. O’Loughlin, & L. Roselle (Eds.), Forging the World: Strategic Narratives and International Relations. https://doi.org/10.3998/mpub.6504652
Nathan, A. J., Shevtsova, L., Milani, A., Vatanka, A., Corrales, J., Wehrey, F., Cooley, A., Merloe, P., Applebaum, A., Rutzen, D., Pomerantsev, P., Brady, A. M., Deibert, R., & Walker, C. (2021). Authoritarianism Goes Global: The Challenge to Democracy (L. Diamond, M. F. Plattner, & C. Walker (Eds.); Vol. 32, Issue 3). Johns Hopkins University Press.
Nye, J. S. (2021). Soft power: the evolution of a concept. Journal of Political Power, 14(1), 196–208. https://doi.org/10.1080/2158379X.2021.1879572
Peters, M. A. (2023). Semiconductors, geopolitics and technological rivalry: The US CHIPS & Science Act, 2022. Educational Philosophy and Theory, 55(14), 1642–1646. https://doi.org/10.1080/00131857.2022.2124914
Reinsch, W. A., & Whitney, J. (2025). Silicon Island: Assesing Taiwan’s Importance to U.S. Economic Growth and Security.
Shattuck, T. J. (2020). The Race to Zero?: China’s Poaching of Taiwan’s Diplomatic Allies. Orbis, 64(2), 334–352. https://doi.org/10.1016/j.orbis.2020.02.003
Shepardson, D. (2025, August 22). US lawmakers urge ICAO to oppose China move to extend flight route near Taiwan | Reuters. Reuters. https://www.reuters.com/business/aerospace-defense/us-lawmakers-urge-icao-oppose-china-move-extend-flight-route-near-taiwan-2025-08-22/
Taiwan Ministry of Foreign Affairs. (2024, December 30). 2024 diplomacy review: building a new Taiwan of democracy, peace, and prosperity through integrated diplomacy. Taiwan Ministry of Foreign Affairs. https://en.mofa.gov.tw/News_Content.aspx?n=1328&s=118902&sms=273
TSMC CEO flags 3-nanometre chip production in Japan, investment reported at $17 billion. (2026, February 6). Reuters. https://www.reuters.com/world/asia-pacific/tsmc-plans-3-nanometre-chip-production-japan-with-17-billion-investment-yomiuri-2026-02-04/
TSMC officially begins 2nm chip volume production in Q4 2025. (2025). Taipei Times. https://www.taipeitimes.com/News/biz/archives/2025/12/31/2003849772
Tunde, B. E. (2020). Niche Diplomacy as a Soft Power Strategy for Small States.
Varas, A., Varadarahan, R., Goodrich, J., & Yinug, F. (2021). Strengthening The Global Semiconductor Supply Chain in an Uncertain Era.
Vifflin, N. (2025). TSMC to open chip design centre in Munich, could later support AI development. Reuters. https://www.reuters.com/business/autos-transportation/tsmc-will-open-european-chip-design-centre-munich-germany-2025-05-27/
Weil, S., Gottwald, J. C., & Taube, M. (2025). The European Union. Taiwan, and the Silicon Shield argument: a conceptual assessment through the lens of grand theories. European Politics and Society, 26(3), 537–563. https://doi.org/10.1080/23745118.2024.2417028
WHO states decide not to invite Taiwan to annual assembly. (2024, May 27). Reuters. https://www.reuters.com/business/healthcare-pharmaceuticals/who-states-decide-not-invite-taiwan-annual-assembly-2024-05-27/
Woo, R. (2024, January 24). Former Taiwan ally Nauru re-establishes diplomatic ties with China. Reuters. https://www.reuters.com/world/asia-pacific/china-nauru-re-establish-diplomatic-ties-state-media-2024-01-24/
Published
Issue
Section
License
Copyright (c) 2026 Muhammad Raditya Iskandarsyah, Moh. Fathoni Hakim (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
