Following the China-US talks, the future of Taiwan's chip industry is creating a critical area of ​​uncertainty for the automotive sector. While relative stability in the supply chain may be possible in the short term, geopolitical risks could continue to exert cost and access pressure on automotive manufacturers in the long term. Fluctuations in chip supply, particularly in import-dependent automotive markets, could directly impact production capacity and vehicle prices. Taiwanese manufacturers account for over 60% of the global semiconductor supply. Approximately 70% of these chips, used in critical components of the automotive sector from engine control units to battery management systems, are exported to the US and are under strategic pressure due to Section 232 tariffs. The Taiwanese chip industry, projected to reach a size of approximately $122.5 billion by 2025, controls about 70% of the global foundry market. This clearly demonstrates Taiwan's undisputed leadership in global semiconductor production and the dependence of many sectors, including the automotive industry, on this country.

Taiwan's largest chip manufacturer is the clear leader in the industry, with revenues of $122.54 billion and a 69.9% global market share as of 2025. The company's growth reached 36.1% compared to 2024, while another major Taiwanese manufacturer has revenues of $7.63 billion and a 4.35% market share. Another manufacturer has revenues of $1.56 billion and a 0.89% share, while yet another prominent company has revenues of $1.40 billion and a 0.80% market share.

By 2025, the global chip market is projected to reach a total size of $169.47 billion, with Taiwan maintaining its dominant position with approximately 75% of the market share. Following Taiwan, South Korea leads with $12.63 billion in revenue and a 7.2% market share, while China has $9.33 billion and a 5.3% share, and the US has $6.79 billion in revenue and a 3.9% market share. A temporary reduction in tariffs was achieved following China-US talks. Tariffs on goods from China to the US were reduced from 57% to 47%, while for Japan and South Korea, this rate dropped to 15%. A similar reduction is expected for Taiwan, with tariffs potentially falling from 20% to 15%. The fact that the Taiwan issue was not directly addressed during the temporary truce in the talks seems to have reduced the risk of a sudden crisis in the chip supply chain in the short term. However, geopolitical pressure continues. China's continued characterization of Taiwan as the "most important issue" suggests that new tensions may arise in the future.

Chip dependence is critically important for the automotive sector. The use of over 1,000 semiconductors in modern vehicles makes Taiwan's share of the global chip market, approximately 75%, a direct determinant for automotive manufacturers. Therefore, geopolitical tensions create a risk of disruption in the supply chain. In the short term, easing tariffs could ease production plans by reducing chip costs for automotive manufacturers. This is particularly important for electric vehicle (EV) production, which is critical for battery management systems. In the medium term, however, US restrictions on AI chip exports and China's antitrust investigations against some US companies could create bottlenecks in advanced driver assistance systems (ADAS) and autonomous driving technologies. Import-dependent automotive production is directly affected by fluctuations in Taiwan's chip supply, and a new crisis similar to the export slowdown experienced after US tariffs in 2025 could limit production capacity.

In a positive scenario, a reduction in tariffs to 15% could provide automotive manufacturers with a cost advantage. This could particularly contribute to accelerating the electric vehicle transition. In a negative scenario, a renewed escalation of tensions between China and the US could lead to disruptions in the supply of chips from Taiwan. In such a case, production stoppages and price increases in the automotive sector would become inevitable. While the China-US talks have provided limited short-term relief to the automotive sector, they have not eliminated long-term risks. The most critical issue in this process will be the development of alternative supply strategies to reduce dependence on Taiwanese chips.