Taiwan also forms a major geo-strategic partnership for the industry with the presence of TSMC, the world leader in manufacturing the most advanced electronic chips.
Could Semiconductor Shortages See Next Rebound? This is essentially the warning sent by the boss of TSMC (Tiwan Semiconductor Manufacturing Co) during an exchange with CNN on July 31, 2022. In the question? Tensions are rising between China and the US over the status of the Taiwan Strait and islands.
Recent Chinese tensions surrounding Taiwan stem from US House Speaker Nancy Pelosi’s current tour of Asia. He has already been to Singapore and is now in Malaysia. He is also scheduled to visit South Korea and Japan. And in this program, another phase is planned: Taiwan.
We have to go back to 1997 to trace the visit of the President of the American House of Representatives to Taiwan. Since then, no such high-ranking official has returned to the island, which Beijing considers a rebel province. Any contact between US representatives and island officials is therefore seen as interference and a violation of sovereignty.
TSMC factories that will go out of service
It is in this context that Taiwan boss Mark Liu made his warning. A military escalation between Taiwan and mainland China, but also with the United States, could cause TSMC to become inactive and therefore cause serious repercussions internationally. The group will then no longer be able to function, for example in the event of an attack.
TSMC is one of the world’s most advanced semiconductor manufacturers, along with South Korea’s Samsung and American Intel. These companies are now competing for class 3 nanometer transistors and are able to market products with 5 and 7 nanometer precision.
No one knows if Nancy Pelosi will make a stop on Taiwan or, if that scenario plays out, how China will react. We know that live ammunition exercises have been announced near the Chinese coast facing Taiwan and we can expect Chinese aircraft to intrude near Taiwan’s airspace to put pressure on the island’s defenses.
Rather than leading to an invasion of the island, which today is a highly unthinkable possibility, these tensions could lead to a military skid due to poor appreciation on one side or the other. It is to prevent an event of this nature – such as the bombing of TSMC facilities – that Mark Liu spoke of.
At the technological level, Taiwan has become a strategic node in semiconductor production. Like many countries, China also has considerable demand in this field. And local businesses have yet to achieve the same quality. Firm Semiconductor Manufacturing International Corporation (SMIC) etch at 14 nanometers.
By speaking in this way, Mark Liu also wants to warn that taking over Taiwan by force will have enormous local and international consequences, and China’s gains in the event of victory will not be guaranteed. TSMC, according to Mark Liu, requires continuous communication with partners in Asia, Europe and the United States.
A takeover of TSMC by China will have the effect of deactivating industrial manufacturing sites. In short, ” No one can control TSMC by force “Judge Mark Liu. China won’t necessarily be able to reopen factories without these external links – but it can still get a hand in research and development.
It is not certain that supplying the world with electronic chips constitutes a sound argument for China, aiming to revise downward its claims on Taiwan. The obsession with a single and fully reunified China remains the core compass of power. What happens to TSMC in such a case will be contingent.