Former U.S. Congressman Gallagher: If China invades Taiwan, the U.S. AI industry may suffer a devastating impact

U.S. President Trump and Chinese President Xi Jinping met at the White House on September 24. (AP)

[Compiled by Chen Chengliang/Comprehensive Report] If China launches a blockade or invasion of Taiwan, what impact will the U.S. AI industry suffer? The Wall Street Journal published a column on the 24th. Mike Gallagher, the first chairman of the U.S. House of Representatives’ Special Committee on U.S.-China Strategic Competition and former Wisconsin Republican congressman, believes that Taiwan’s key position in the advanced semiconductor supply chain has created a more direct connection between Taiwan Strait security and U.S. AI competition.

Gallagher, who currently serves as the head of the defense business of Palantir Technologies, an American data analysis company, and a distinguished fellow at the Hudson Institute, used a "hypothetical 2028" scenario in his column to describe how if Beijing first imposed a naval blockade on Taiwan and then launched an invasion, the United States might face a stagnation in cutting-edge AI research and development, a freeze in data center construction, and a sharp decline in financial markets.

He believes that once a conflict across the Taiwan Strait occurs, it may directly affect the United States' AI industry, which currently relies heavily on Taiwan's advanced chip manufacturing capabilities.

In the commentary, Gallagher quoted former US Indo-Pacific Commander Philip Davidson's assessment to Congress in 2021, regarding 2027, when China may have the ability to attack Taiwan, as the "Davidson window", referring to the often discussed risk time period for China to attack Taiwan; he also quoted Anthropic CEO Dario Amodei's warning about the rapid improvement of AI capabilities, further calling the time pressure caused by the rapid development of AI during this period the "Dario window" window).

Gallagher believes that these two timelines are approaching, and based on this, he analyzes the possible linkage between AI competition and Taiwan Strait security.

U.S. chips still have to be sent back to Taiwan for packaging

Gallagher further described Taiwan as a "single point of failure" in the U.S. AI supply chain. He pointed out that TSMC produces about 90% of the world's most advanced semiconductors and about 60% of all semiconductors; even though Nvidia's Blackwell chips have been mass-produced at TSMC's Arizona plant, some U.S.-made chips still need to be sent back to Taiwan for packaging.

Gallagher pointed out that TSMC has announced the deployment of advanced packaging facilities in Arizona, but the relevant production capacity is not expected to be in place until 2029.

Gallagher finally advocated that the United States should incorporate Taiwan's defense into its AI and semiconductor strategy, accelerate the clearing of backlog of arms sales to Taiwan, simplify arms sales procedures, prepare contingency measures for financial sanctions in advance, and at the same time deepen semiconductor cooperation with Japan and the Netherlands. He also opposes the United States and China jointly slowing down the pace of AI research and development, and advocates that the United States maintain its competitive advantage in AI.