Escalating U.S.-Iran conflict is impacting U.S.-China rivalry. Taiwan’s security and energy economy are facing severe tests. |
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U.S. Focus Shifts to Middle East: Taiwan's Challenges
On February 28, the United States launched the most intense military strike since the Gulf War. In coordination with Israel, it carried out airstrikes on Iran under the codename “Operation Epic Fury.” Within 12 hours, more than 500 military targets across Iran were destroyed. Iran’s Supreme Leader Ali Khamenei and senior military officials were also killed in a precise decapitation strike. Iran retaliated by attacking Israeli and U.S. military bases in the Middle East. The already fragile regional order quickly collapsed, pushing global politics and the economy into deeper uncertainty. For Taiwan, thousands of kilometers away, the geopolitical conflict in the Middle East not only poses economic challenges and tests Taiwan’s resilience, but under the broader context of U.S.–China rivalry may also create unpredictable bargaining variables.
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The Strait of Hormuz may be cut off. Taiwan’s natural gas reserves can only last 11 days, raising national security concerns. |
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Strait of Hormuz Blockade Exposes Taiwan's Energy Security Risks
The shadow of a U.S.–Iran war looms large. As the Strait of Hormuz—one of the world’s most critical energy shipping lanes—approaches near blockade, the consequences are profound. Carrying roughly one-fifth of the world’s crude oil and liquefied natural gas (LNG) shipments each day, this lifeline, if cut off, would not be a distant conflict for Taiwan thousands of miles away, but a direct survival challenge tied to national security.
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President Donald Trump of the United States claims that Taiwan stole chips. A semiconductor veteran recounts the industry’s rise. |
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Trump’s Slander Must Not Stand: Taiwan's Semiconductors Not Stolen
On February 20, in response to a U.S. Supreme Court ruling on tariffs, President Donald Trump again claimed that Taiwan had “stolen” America’s semiconductor industry. I find this deeply regrettable. I consider myself a veteran of Taiwan’s semiconductor sector. In the early days, I participated in planning and developing the industry, and later, as a venture capitalist, I invested in many semiconductor-related companies, including wafer manufacturing, integrated circuit (IC) design, and packaging and testing. Over the past decades, I have witnessed the industry’s growth from multiple roles—from early technology transfer and learning, to the gradual development of local capabilities, and finally to its current indispensable position in the global supply chain. I have seen teams overcome constraints under difficult conditions and watched Taiwan’s semiconductor industry steadily move to the center of the global stage.
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Minister of Economic Affairs Kung Ming-hsin says that if the U.S.-Iran conflict drags into April, full coal-fired power generation will be the last resort. |
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February 27:
The 2025 financial report of the Taiwan Semiconductor Manufacturing Company (TSMC) was released. Its Arizona subsidiary in the United States turned profitable, earning over NT$16.1 billion (about US$508 million). However, its Japan Kumamoto plant (JASM) saw losses expand to nearly NT$10 billion (about US$308 million), and its Germany plant (ESMC) lost NT$688 million (about US$21.7 million). Meanwhile, the China subsidiary earned NT$11.5 billion (about US$360 million), and the Nanjing plant earned NT$27.6 billion (about US$870 million). TSMC’s largest customer shifted from Apple to NVIDIA. |
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February 28:
The Ministry of Labor released its 2025 survey on worker living and employment conditions. Only 7 percent expressed willingness to work overseas, with just 1.7 percent willing to work in mainland China—a record low in recent years. The Directorate-General of Budget, Accounting and Statistics reported that the mainland remains the top overseas work destination, but its share has dropped to 34.7 percent, half of its peak. |
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March 3:
The outbreak of fighting between the United States and Iran is affecting Taiwan’s oil and gas supply. Minister of Economic Affairs Kung Ming-hsin stated that Taiwan can manage through March, and if the conflict drags into April, contingency measures are ready, with full reliance on coal power as the last resort. Taiwan imports 96 percent of its energy. The Taiwan Institute of Economic Research (TIER) estimates that oil reserves can last about 120 days, but natural gas only about 11 days. |
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March 3:
Starting February 2025, South Korea introduced entry cards labeling Taiwan as “Taiwan, China.” The Ministry of Foreign Affairs (MOFA) has repeatedly requested corrections, but the Korean government has yet to respond positively. MOFA advised Taiwanese travelers to use paper entry cards instead. |
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March 4:
In the Cambodia Prince Group money laundering case in Taiwan, the Taipei District Prosecutors Office investigated NT$10.7 billion (about US$337 million) laundered funds and seized movable and immovable assets worth over NT$5.5 billion (about US$173 million). Group leader Chen Chih and 62 individuals, along with 13 companies, were indicted under the Money Laundering Control Act and Organized Crime Prevention Act. Prosecutors sought the maximum statutory sentence of 13 years for Chen. |
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March 5:
The U.S.-Iran war severely impacted global stock markets, but Taiwan stocks staged a major rebound on March 5, closing up 844 points—the fifth-largest single-day closing gain in history. Director Tsai Chiung-min of the Department of Foreign Exchange, Central Bank, stated that the worst turbulence should be over. He confirmed the volatility was mainly due to foreign investors selling Taiwan stocks, which disrupted the New Taiwan dollar exchange supply and demand. The Central Bank intervened to stabilize the currency. |
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March 6:
The Legislative Yuan referred the Executive Yuan’s version and Kuomintang’s (KMT) version of the arms procurement bill to committee, merging them with the Taiwan People’s Party’s (TPP) version for review. The KMT draft allows NT$380 billion (about US$12 billion) in military procurement for weapons already quoted by the United States and authorizes the Ministry of National Defense to propose a second special bill if further U.S. quotations are needed. |
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March:
The Legislative Yuan recently passed amendments to the Act Governing the Settlement of Ill-gotten Properties by Political Parties and Their Affiliate Organizations, Satellite Broadcasting Act, and Legislative Yuan Organization Act. Premier Cho Jung-tai refused to counter-sign them again, citing constitutional concerns—his third refusal to counter-sign legislative amendments. Opposition parties filed a censure motion against Cho, and with their majority, sent it directly to second reading. |
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