Something that doesn't get discussed enough when people talk about semiconductor supply chains is how much of the actual concentration problem is a knowledge problem as much as a geography problem, and why that distinction matters for how you think about what a disruption would actually look like.
The basic facts are by now well-repeated: Taiwan Semiconductor Manufacturing Company produces somewhere around 90 percent of the world's most advanced chips, the ones running below 5 nanometers, the ones inside the systems that power modern data centers, defense applications, medical imaging equipment, and precision scientific instrumentation of the kind that companies working in quantum sensing and adjacent fields depend on entirely. The geography part of that observation, which is to say the proximity to China and the status of the Taiwan Strait as one of the more closely watched stretches of water in the world, tends to be where the public conversation starts and sometimes also where it stops.
What gets less attention is that the concentration problem wouldn't disappear even if you could relocate TSMC's facilities to somewhere geopolitically calmer, because the more fundamental issue is that advanced semiconductor fabrication is arguably the most technically demanding manufacturing process ever attempted at scale, and the knowledge required to run it at TSMC's level of precision has been built up over decades in a way that doesn't transfer easily or quickly to a new site, a new workforce, or a new set of process conditions.
This matters in practical ways that are not always obvious from the outside. When working with suppliers of specialized electronics, whether FPGAs, control boards, or the kinds of custom components that go into high-precision sensing equipment, what you tend to encounter isn't usually someone saying that their direct supply of chips has been cut off. What you encounter instead is lead times that have stretched by months without much warning, quoted availability that shifts between the time of inquiry and the time an order is placed, and equipment manufacturers citing component availability as the reason a delivery window has moved, without always being specific about which component or why. The shortage of 2020 and 2021 made this pattern visible to a broader audience than it had reached before, but the structural condition that produced it didn't resolve when the shortage eased, and the long lead times on certain categories of components have become something that procurement planners have quietly absorbed into their standard assumptions.
The announced fabs in Arizona, Japan, and the ESMC facility being built in Dresden, a joint venture involving TSMC alongside Bosch, Infineon, and NXP that sits close enough to Frankfurt to feel like it should matter more than it currently does in day-to-day supply chain conversations, are real investments and represent a genuine effort to distribute production geographically. The reasonable question to hold alongside that news is what those facilities will actually produce once they're operational, because the early phases of both the Arizona and European sites are focused on processes that are advanced by general standards but older-generation by TSMC's current output, meaning they are not running the 3nm or 2nm nodes that the most sensitive applications depend on, and the gap between where those fabs start and where leading-edge production sits is not a small one.
There is a theory sometimes called the Silicon Shield, the idea that Taiwan's position as the world's most critical chip supplier functions as a form of deterrence, that no major economy with meaningful exposure to Taiwanese production has a strong incentive to tolerate the kind of instability that would disrupt it. The logic has something to it, but it also places considerable weight on the assumption that decisions affecting the Taiwan Strait will be made with that calculus clearly in view, which is the kind of assumption that tends to feel robust right up until the conditions that tested it actually arrive.
What is harder to find in the public conversation is a sober accounting of what recovery from a significant supply disruption would actually require in terms of time, not because disruption is particularly likely in the near term, but because the feedback loops in semiconductor manufacturing are long in a way that makes them easy to underestimate. Production capacity that goes offline doesn't come back in a quarter. Yield rates on advanced nodes take time to rebuild even under ideal conditions. The engineers and technicians who run these processes at production scale are not drawn from a large available pool, and neither are the specialized equipment suppliers, the chemical inputs, or the accumulated process knowledge that makes one fab's output meaningfully different from another's.
Whether the new facilities being built outside Taiwan will eventually close the gap on leading-edge production is a question probably measured in years rather than quarters, and whether the organizations most exposed to that risk are building that timeline into their planning is, at least from the conversations that tend to happen around supplier diversification and component risk, not yet a settled matter.