Taiwan’s Tech Dependence Is Emerging as a Military Risk, CSET Says

A new analysis from the Center for Security and Emerging Technology argues that Taiwan’s technology sector is not just an economic asset, but a strategic vulnerability that could shape military readiness, coalition planning, and the role of AI in future defense.

Technology strength is becoming a security question

Taiwan’s global importance in advanced technology, especially semiconductors, has long been obvious to governments and markets. The new discussion from the Center for Security and Emerging Technology (CSET) pushes that point into sharper policy territory: the same tech ecosystem that powers Taiwan’s economic influence may also create operational risks for its defense posture.

CSET’s framing is straightforward. Taiwan’s technology sector can support resilience, but it can also expose the island to pressure if key supply chains, personnel pipelines, or industrial dependencies are disrupted. For technology leaders and compliance teams, the implication is clear: semiconductor strategy, AI strategy, and national security strategy are increasingly intertwined.

That matters because defense planning now depends not only on weapons platforms and alliances, but also on the availability of advanced chips, reliable infrastructure, and the ability to integrate emerging technologies into military operations. CSET says those factors have direct consequences for Taiwan’s military capability and for any coalition response built around shared defense planning.

AI and talent are now part of defense readiness

CSET’s own researchers have been advancing the argument that talent is a core defense input, not an afterthought. In the materials accompanying the analysis, Research Fellow Diana Gehlhaus calls for coordination across the Department of Defense to cultivate talent that can advance the use of AI.

That point is increasingly relevant in Taiwan’s context. Artificial intelligence is no longer only a commercial tool or a back-office efficiency layer. In defense settings, it can affect sensing, targeting, logistics, decision support, and battlefield coordination. If a state lacks enough trained people to deploy and sustain those systems, the technology may exist on paper without translating into military advantage.

For compliance teams inside large technology firms, that raises practical questions. Who controls the talent needed to run advanced systems? Where are the chokepoints in training, licensing, and export controls? Which partnerships create strategic resilience, and which ones create dependency? CSET’s analysis suggests those are now defense questions as much as corporate ones.

TSMC’s global footprint is changing strategic calculations

The policy debate around Taiwan is also being reshaped by TSMC’s expanding global footprint, particularly its growing investment in the United States. CSET’s Sam Bresnick shared expert perspective in a Wall Street Journal article examining how those moves are affecting strategic thinking.

That expansion has two sides. On one hand, it can diversify supply, reduce concentrated risk, and deepen industrial links with the United States. On the other, it changes the strategic map by tying more critical chip capacity to offshore facilities and by complicating assumptions about how much of Taiwan’s semiconductor advantage remains on the island itself.

The human stakes are high because chips are no longer a niche input. They underpin consumer electronics, cloud services, defense systems, telecom infrastructure, and industrial automation. If a conflict or blockade threatened Taiwan’s chip sector, the impact would extend far beyond the island. If production capacity becomes more globally distributed, governments may gain resilience, but they may also have to rethink how to protect, regulate, and coordinate that capacity across jurisdictions.

U.S.–China competition is reshaping Taiwan planning

CSET’s Sam Bresnick and CSIS’s Aidan Powers-Riggs also published analysis in Lawfare on how U.S.–China competition over artificial intelligence is reshaping strategic calculations around Taiwan.

That linkage is important. Taiwan is not only a flashpoint because of geography or sovereignty; it is also part of a wider contest over who will set the standards, supply chains, and security architecture for advanced computing. AI systems depend on chips, data, software, and sustained investment. Any disruption in Taiwan would have ripple effects across that entire ecosystem.

For policymakers, the result is a more complicated defense picture. Planning for Taiwan now involves not just deterrence and force posture, but also the integrity of tech supply chains, the resilience of digital infrastructure, and the ability of allies to keep AI-enabled systems functioning under stress. In practice, coalition defense increasingly requires coordination among defense agencies, industrial planners, and technology firms.

U.S. tech firms are becoming part of the security landscape

Another thread in CSET’s public-facing commentary is the growing security role of U.S. technology companies themselves. In an op-ed published by Nikkei Asia, Sam Bresnick explored the evolving role of U.S. technology companies in international security, especially in times of conflict.

That is an increasingly consequential issue for compliance teams. The old boundary between commercial tech and security policy has blurred. Cloud providers, chip designers, AI developers, and platform companies may find their products, services, and partnerships treated as strategic assets. That can bring new obligations, more scrutiny from governments, and increased exposure to geopolitical risk.

It also means corporate decisions can have policy effects. Investment locations, supplier relationships, employee mobility, and product access controls may all influence national resilience. For firms with operations in Taiwan, the United States, or other Indo-Pacific markets, the challenge is not just business continuity. It is preparing for a world where technology infrastructure is part of the defense environment.

What technology and compliance teams should watch

CSET’s analysis and related commentary point to a few concrete pressure points that leaders should track now:

• Supply chain concentration: Advanced chip production remains highly specialized. Any disruption in Taiwan can affect global systems quickly.
• Talent pipelines: AI and defense capability depend on skilled people, not just hardware and software.
• Cross-border investment: Global expansion by firms such as TSMC may reduce single-point risk but increase regulatory complexity.
• Defense integration: AI adoption in military settings requires coordination across agencies and with industry.
• Geopolitical exposure: U.S.–China competition is shaping how governments evaluate technology partnerships and industrial policy.

The immediate policy issue is not whether Taiwan matters to global tech. It already does. The more urgent question is how governments and firms will manage the fact that the same systems driving economic growth are now part of military planning.

For decision-makers, that means closer attention to contingency planning, export and investment rules, workforce readiness, and the security implications of where critical technologies are built and maintained. CSET’s message is that the tech stack and the defense stack are now the same conversation.