The island nation of Taiwan is famous for a few things. It’s the home of bubble tea, a drink that gained popularity in the US in the 90s and saw a resurgence through TikTok in recent years. The island itself is famed for its beautiful mountains, unique rock formations, and Taroko Gorge. But in tech, Taiwan is perhaps best known for its microchips.
Taiwan produces 60% of the world’s semiconductors, used in everything from mobile phones to electric cars. The sector makes up 15% of the country’s economy. It also means that, politically, what happens in this small nation — with a population of around 23 million — can have global ramifications.
Like in many other countries, 2024 will see Taiwan hold major elections that could determine the future of the island and, subsequently, the future of the global tech market. Though Saturday’s election is unlikely to trigger an immediate shift in the supply of microchips, it could see long-term investment in the island change focus.
One of the major issues stems from Taiwan’s complicated history with China. Beijing views Taiwan as a province and has made clear its aspiration to unify the island with the rest of China — with the use of force a real possibility. Should Taiwan come under China’s sway, its position as the chipmaker for the economic West will come under threat.
Here, we break down everything you need to know about the Taiwanese election.
The people of Taiwan are heading to the polls in what is being described as the closest election since the nation became a democracy in 1996. Polls will open at 8 am and close eight hours later, with results expected the same evening. About 19.5 million people are eligible to vote, and turnout is usually high — in 2020, almost 75% of the population cast a ballot.
Taiwan’s president, Tsai Ing-wen, has reached the end of her term limit and is stepping down. Looking to replace her is the current vice president, Lai Ching-te. She is also a member of the ruling Democratic Progressive Party (DPP), which casts itself as the pro-independence party.
Ching-te is running against Hou Yu-ih from the more conservative Kuomintang (KMT). He openly advocates for a closer relationship with Beijing, though he has said he opposes annexation.
The KMT previously ruled Taiwan under an authoritarian dictatorship for decades after fleeing the Chinese civil war.
The DPP was originally expected to hold onto power, but polls have narrowed.
You can find a microchip in just about anything these days. From your phone to your car and even your fridge, semiconductors play a vital role in our lives. The world produces more than a trillion chips a year; a modern car has anywhere between 1,500 to 3,000 chips.
The semiconductor market size was valued at US$527.88bn in 2021 and is projected to grow from $573.44bn in 2022 to $1.38tn in 2029, according to a Fortune Business Insight study.
Given the importance of chips to the tech sector and the vital role tech is playing in modern economies, any disruption by the Taiwan election could cause serious delays and do major damage to global trade. This was highlighted in the chip shortage that followed the 2020 Covid-19 pandemic.
Disruption to supply lines saw a worldwide chip shortage that impacted more than 169 industries, with delays of up to 20 weeks on some products.
One major contributing factor was the presence of COVID-19 in Taiwan itself. At the same time, the island also faced its worst drought in more than half a century in 2021, compounding delays and highlighting Taiwan’s importance to global supply.
Recent elections worldwide, such as the US elections of 2016 and 2020, have seen increased use of social media platforms such as Facebook and X (formerly Twitter). But this has also led to an increase in misinformation and fake pictures and videos.
Taiwan is also facing its own misinformation controversies. One of the major social platforms used in the country, PTT, is used by more than 1.5 million people in Taiwan, but several untrue stories have gone viral on the platform in recent months, according to NPR.
Taiwan’s political establishment has pointed fingers at China, claiming Beijing operatives are generating negative stories to sway the election.
“Those kinds of remarks were actually created, generated from the other side of the Taiwan Strait to create division or distrust between Taiwan and India,” Taiwan’s foreign minister, Joseph Wu, said of a fake story about Indian workers during a December news conference.
Beijing has long denied accusations of interfering in Taiwan’s democratic process. But a report from analysts DoubleThink Lab said it had found credible evidence linking several disinformation posts and pro-Chinese propaganda on social media platforms to IP addresses in the mainland.
In November, Meta accused China of stepping up efforts to manipulate people in other countries on social media, becoming the third most common source of foreign influence operations behind Russia and Iran.
According to the Economist, on the day before polling booths open, Lai Ching-te is leading with an average of 36% of the votes to Hou Yu-ih’s 31%, placing the DPP as favourites to retain power.
One of the biggest uncertainties is how China will react to the results of the Taiwan election. If the DPP retain Taipei, then it is expected the ruling party will continue to grow the country’s relationship with the West, while relations with Beijing will remain frosty.
Russia’s invasion of Ukraine has left US politicians jittery over Taiwan, with Washington concerned that Chinese President Xi Jinping may make military moves in the region. Beijing has weaponised military drills, economic coercion, cognitive warfare, and diplomatic isolation in efforts to subdue the country.
If the KMT win on Saturday, Yu-ih will have to balance his pledge to be friendlier to China with the will of a people who are far more suspicious of it than when the KMT last governed. Should the DPP win, a hostile reaction from China is all but guaranteed, the only question is what form it will take.
Either way, the threat of disruption to the supply of microchips looms over the election, But, according to a BBC report on the country, people in Taiwan resent the idea of moving production away from the island.
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