Gadgets, microchips and semiconductors with the… dropper in case the tension between China and Taiwan is generalized.
Already the pandemic, the lockdown and the Russian-Ukrainian war have caused significant shortages in the global market.
From inflation to the automotive industry that has been put on ice, the planet is experiencing an unprecedented shortage of products and goods that until recently we took for granted.
The consequences of a war between China and Taiwan would be utterly devastating, as it would lead to the loss of life, but also of a grim impact on the global economy, particularly in the field of technology.
The recent visit of the speaker of the US House of Representatives, Nancy Pelosi, to Taiwan has caused great tension in U.S.-China relations.
At the same time, Pelosi’s visit has heightened concerns among many analysts about a possible armed conflict between China and Taiwan.
TSMC’s president, Mark Liu, also spoke about the impact of a possible China-Taiwan war on the tech industry. More specifically, Liu made it clear in an interview with CNN that if China invaded Taiwan, the world’s most advanced processor manufacturing plants would become “non-functional.”
As the head of the company that is the largest supplier of microchips in the world noted in his interview, the operation of the factories would not be possible, as they are based on global supply chains.
“No one can control the TSMC by force. If military action is taken, TSMC’s plants will become non-operational,” Liu said.”Because these are highly sophisticated manufacturing sites, there is a dependence on real-time connection with the outside world, with Europe, with Japan, with the US, from materials to chemicals to spare parts to engineering software and diagnostics,” he added.
What is TSMC
TSMC is the largest manufacturer of advanced semiconductors in the world.
The Taiwanese company among other things manufactures integrated processors for leading American technology companies such as Apple and Qualcomm. In fact, it owns over 50% of the world’s semiconductor production.
On the tension that has arisen over Pelosi, in Taiwan, Liu was more than clear. “The war will have no winners, we are all losers,” he said.
Chips and Science Act
Last week, the Chips and Science Act was “passed” by the US House of Representatives, which provides incentives worth billions for the construction of semiconductor plants on American soil, with the aim of giving the US autonomy in this area.
U.S. lawmakers even said that it is critical of national security to ensure the country’s supply of effective and modern microchips, should China invade Taiwan or alternatively make it difficult to manufacture semiconductors in the island Asian country.
Although the “incentives” of the relevant law are going to be directed to US companies (such as Intel), taiwanese TSMC, which is building a new factory worth 12 billion dollars in Arizona could also benefit from the relevant forecasts.
The comparison with Ukraine
Liu compared the possible Taiwan-China conflagration to the Russian invasion of Ukraine, saying that although the two cases are very different from each other the economic impact for the rest of the countries will be similar. In fact, he encouraged the political leaders on both sides to try to avoid a conflict.
According to the president of the TSMC, an invasion of Taiwan by China would cause economic turmoil in China, Taiwan, and the entire West. He also noted that TSMC sells microchips to Chinese companies manufacturing consumer products, which need the company’s services to power with advanced processors.