TSMC’s AI-driven profits expose global semiconductor oligopoly risks amid unchecked tech monopolization and supply chain fragility

Indigenous groups in Hsinchu (Taiwan) and Penang (Malaysia) have documented violations of land rights and water access due to semiconductor plant expansions, with local activists framing the industry as a continuation of extractive colonial practices. Traditional ecological knowledge about water conservation and pollution mitigation is systematically excluded from industrial planning, despite its potential to reduce environmental harm from high-purity water consumption and chemical waste.

The semiconductor industry’s rise is deeply tied to Cold War-era industrial policy, where the U.S. and Japan subsidized chip manufacturing to counter Soviet and later Asian competition, creating path dependencies that persist today. The 1980s U.S.-Japan trade wars over DRAM chips set precedents for state intervention in tech markets, while Taiwan’s semiconductor sector was deliberately cultivated as a strategic asset during the 1970s–90s under KMT rule.

In South Korea, Samsung and SK Hynix are framed as national champions, with government policies treating chip dominance as a matter of economic security, contrasting with Western narratives that emphasize market competition. African policymakers, such as those in Rwanda and Nigeria, are exploring open-source chip designs and fabless models to bypass the oligopoly, drawing on post-colonial critiques of technological dependency.

Semiconductor fabrication relies on extreme ultraviolet (EUV) lithography, a technology with energy demands equivalent to a small city and water usage rates of 10–15 million liters per day per fab. The industry’s reliance on rare earth minerals, often mined under exploitative conditions in the Congo and China, introduces additional supply chain vulnerabilities and ethical dilemmas that are rarely addressed in profit-focused analyses.

Artists in Taiwan and South Korea have used speculative fiction and digital art to critique the dehumanizing effects of AI-driven capitalism, portraying semiconductor workers as cogs in a machine that prioritizes profit over well-being. Indigenous Taiwanese groups, such as the Amis and Atayal, have integrated chip factory impacts into oral histories, framing environmental degradation as a violation of ancestral lands and spiritual balance.

Scenario modeling suggests that without diversifying chip production to Africa, Latin America, and the Middle East, supply chain disruptions could trigger global tech recessions within a decade, particularly as geopolitical tensions escalate. Alternative models, such as open-source hardware and cooperative fabless ecosystems, could reduce dependency on TSMC and its peers but require coordinated public investment and policy shifts.

Factory workers in TSMC’s supply chains, predominantly migrant laborers in Taiwan and Malaysia, face exploitative conditions with minimal labor protections, yet their voices are absent from profit narratives. Communities near semiconductor plants in India and Vietnam report health crises linked to toxic emissions, while local journalists documenting these issues face censorship or legal harassment.