17 September 2026
Executive Summary
The forthcoming meeting between US President Donald Trump and Chinese President Xi Jinping is placing renewed attention on Taiwan and the security of the global semiconductor supply chain.
Xi is expected to visit Washington for talks with Trump on 24 September.
Reuters reports that officials and lawmakers in Taiwan and Japan are closely watching whether the talks result in any change in US language or policy concerning Taiwan.
No such change has been announced.
The issue is commercially important because Taiwan remains the dominant global manufacturing centre for the most advanced semiconductors.
More than 90% of the world’s advanced chips are manufactured in Taiwan, according to estimates cited by officials and industry analysts.
Those chips are critical to:
- Artificial intelligence.
- Data centres.
- Telecommunications.
- Automotive manufacturing.
- Aerospace.
- Defence.
- Medical technology.
- Industrial automation.
AI is also expected to feature prominently in the Trump-Xi discussions.
The United States and China remain divided over:
- Advanced semiconductor access.
- Chip export controls.
- AI regulation.
- Technology transfer.
- Alleged model copying.
- Military use of autonomous AI.
US Treasury Secretary Scott Bessent is expected to meet Chinese Vice Premier He Lifeng ahead of the leaders’ meeting to discuss AI-related issues.
For businesses, the relevant issue is not predicting the outcome of the summit. It is recognising how much global technology production remains exposed to decisions involving two governments and one geographically concentrated semiconductor industry.
UK Impact
UK businesses may have substantial indirect exposure even if they do not purchase chips directly from Taiwan.
Semiconductors sit inside:
- Vehicles.
- Machinery.
- Telecoms equipment.
- Computers.
- Medical devices.
- Energy systems.
- Security equipment.
- Consumer electronics.
A company may therefore have Taiwan exposure several layers down its supply chain without recognising it.
Previous semiconductor shortages demonstrated how relatively inexpensive components can halt production of much higher-value finished products.
Global Impact
Taiwan’s semiconductor position creates an unusually concentrated global dependency.
Diversification is under way through new manufacturing investment in:
- United States.
- Japan.
- Europe.
- South Korea.
But advanced fabrication capacity cannot be reproduced quickly.
New semiconductor plants require:
- Billions of dollars of investment.
- Specialist machinery.
- Skilled engineers.
- Reliable electricity.
- Large quantities of ultra-pure water.
- Complex chemical supply chains.
The US-China relationship adds another dimension because semiconductor access has become part of strategic competition between the countries.
Changes to export controls or technology restrictions can therefore affect supply chains even without physical disruption in Taiwan.
Our View
Businesses should use the renewed attention on Taiwan to map hidden semiconductor dependencies.
Companies should ask:
- Which products contain advanced semiconductors?
- Where are those chips manufactured?
- Does the supplier disclose fabrication location?
- Are alternative chips technically compatible?
- Are second-source suppliers approved?
- How long would product redesign take?
- Could export controls affect availability?
- Are critical chips held in inventory?
- How much inventory would be appropriate?
- Are distributors holding genuine stock?
- Could alternative suppliers depend upon the same Taiwanese foundry?
- Are semiconductor shortages covered by continuity plans?
- Could a relatively low-cost chip halt a high-value production line?
- Are contractual delivery obligations realistic during disruption?
- Are customers aware of semiconductor dependencies?
The central question is not whether businesses believe tensions will escalate or ease.
It is:
“What happens to our operations if access to Taiwanese advanced semiconductors becomes restricted for any reason?”
That is a supply-chain question businesses can answer now.
Risk Indicator: HIGH – TAIWAN, SEMICONDUCTORS & TECHNOLOGY SUPPLY CHAINS
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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