(Substack)—Without Taiwan, Artificial Intelligence research comes to a screeching halt in America. That is neither hyperbole nor fearmongering. Nearly every technological aspect of Artificial Intelligence used in the United States today originates in Taiwan or through Taiwanese companies.
If Taiwan were to align with China, whether by choice or by force, the infrastructure for Artificial Intelligence would become instantly scarce. It would be like a family no longer being able to go to the grocery store. Whatever is in the house at the time is all the food they’d have left. Their only option would be to start growing their own food, and just like trying to build our own AI component infrastructure in America, the food rations would run out before the first fruit or vegetable was grown.
On today’s episode of The JD Rucker Show, I discussed a warning by Elon Musk to Senator Ted Cruz about our reliance on Taiwan and the need to start producing our own computer components in the United States.
Below is an article and video that details the world’s reliance on Taiwan for AI infrastructure today…
Taiwan: The Linchpin Holding Up the AI Revolution
Ever wonder where the brains of artificial intelligence are born? The answer might surprise you: it’s Taiwan. This island nation produces a staggering 90% of the world’s most advanced semiconductors – the chips that power everything from your smartphone to cutting-edge AI. So, why is this relatively small island so crucial, and what happens if its dominance is threatened?
Taiwan isn’t just a microchip factory; it’s the beating heart of the entire AI ecosystem. Beyond semiconductors, Taiwanese companies are estimated to manufacture 90% of the AI servers that keep the digital world humming. Think about that for a moment. All of Nvidia’s AI chips, the very foundation of many AI applications, are made there. Without Taiwan, the AI revolution as we know it would stall.
But this dominance faces a looming threat. China considers Taiwan part of its territory and has become increasingly assertive in its claims. The future of AI is now intertwined with the security and stability of Taiwan. Can Taiwan stay safe and continue driving AI forward?
From Toys to Tech Titan: Taiwan’s Rise in the Semiconductor Industry
It wasn’t always this way. Back in the 1970s, Taiwan was known for producing cheap toys and low-quality goods. But the government had a vision: to transform the island into a high-tech powerhouse. They saw the potential in chip technology and began investing heavily in the 1980s.
This investment wasn’t just about money. It was about building a world-class talent pool. STEM degrees (science, technology, engineering, and mathematics) became highly valued, attracting bright minds and fostering a culture of innovation. With a large pool of engineers, entrepreneurship flourished. Taiwan became a global leader in efficient mass manufacturing, with factories both at home and in China.
Out of this environment, the Taiwan Semiconductor Manufacturing Company (TSMC) was born. Today, TSMC’s scale and technology are unmatched. It’s been a partner to Nvidia since the beginning, helping to fuel the growth of AI.
As Nvidia founder and CEO Jensen Huang put it, “Taiwan is the home of our treasured partners, and our partnership has created the world’s AI infrastructure.”
Inside an AI Server: Taiwan’s Hardware Gems
Taiwan’s role goes far beyond just making chips. The island produces almost every vital hardware component needed to build an AI server. What exactly goes into one of these servers?
- Chip: The brains of the operation.
- Motherboard: Connects all the components.
- Power Modules: Provide the necessary electricity.
- Liquid Cooling Systems: Keep everything from overheating.
- Server Rack: Houses multiple servers.
Taiwan makes it all. According to experts, if “you want to do the shopping in Taiwan you can shop pretty much every product every component.”
Asia Vital Components, or ABC, is a prime example of a Taiwanese company playing a crucial role in the AI supply chain. They’ve worked with Nvidia for over two decades, specializing in heat dissipation.
As AI servers become more powerful, they generate more heat. Traditional cooling solutions, like fans, are no longer sufficient. That’s where liquid cooling comes in.
ABC has pivoted its research and development to focus on liquid cooling systems. These systems use water or coolants to efficiently conduct heat away from critical components.
Currently, air cooling dominates the data center market, accounting for 90% of thermal-related spending. Liquid cooling makes up just 10%. However, as AI servers continue to evolve, liquid cooling could soar to 30% by 2028.
An Nvidia NVL72 server, which represents the cutting edge of AI tech, can cost between $3 and $4 million. But even a small, inexpensive cooling component can prevent that server from shipping if it fails. Without proper cooling, these servers would simply melt down. This highlights the importance of these often-unseen companies in the AI revolution.
Taiwan’s Competitive Edge: Why Tech Giants Flock to the Island
What makes Taiwan such a hub for AI hardware? Part of it is the innovative spirit that drives Taiwanese companies. ABC, for instance, relentlessly pursued Amazon as a customer, even setting up shop near their Seattle office. Their persistence paid off, and soon after landing Amazon, Microsoft followed suit.
Taiwan’s small size and efficient infrastructure also give it a competitive edge. Major tech companies like Google, Amazon, and Microsoft come to Taiwan because they can quickly and easily meet with all their partners.
Since 2023, Taiwan’s AI-related exports have surpassed China’s, reflecting its growing importance in the world of AI and the shifting geopolitical landscape. This shift is partly due to the tech war between the US and China. The US has banned the export of certain AI chips to China, leading companies to build their AI servers elsewhere, often in Taiwan or in manufacturing facilities owned by Taiwanese companies in other countries.
With so much AI technology concentrated on one island, the ever-present risk from neighboring China is a major concern. China views Taiwan as part of its territory and hasn’t ruled out using force to bring it under its control.
China has carried out what it calls mock air blockades of Taiwan, using jets carrying live ammunition. They are determined to bring Taiwan into the People’s Republic of China, no matter how long it takes.
To deter a potential invasion, TSMC and Dutch company ASML have developed a “kill switch” that can render their manufacturing plants inoperable. This underscores the deep concern about China potentially gaining control of these sophisticated machines.
Even if an invasion is unlikely, a war could severely damage the global economy. Bloomberg Economics estimates that it would knock out the semiconductor supply chain, delaying AI advancements and causing a $10 trillion hit to global GDP. That’s far greater than the economic impact of the war in Ukraine, the COVID pandemic, and the global financial crisis.
Mitigating the Risks: Diversification and the Future of AI
To reduce these risks, Taiwanese companies have begun diversifying their manufacturing operations. They’re expanding into countries like Mexico and Southeast Asia. TSMC has also broken ground on new facilities in Arizona, Japan, and Germany.
The US government is also encouraging this trend through the CHIPS Act, which offers incentives to bring semiconductor manufacturing back to the United States.
Many clients want to reduce their reliance on Taiwan, but building up manufacturing capabilities in other regions will take time. Replicating Taiwan’s expertise and infrastructure in the short term is simply impossible.
As we move into an AI-powered future, the technology and global stability remain tied to Taiwan. While manufacturing may eventually expand to other regions, Taiwan’s importance will endure for years to come.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
