Taiwan is also an important geostrategic pole for the sector with the presence of the founder TSMC, world leader in the production of the most advanced electronic chips.
Could the semiconductor shortage see a near rebound? This is implicitly the warning sent on July 31, 2022 by the boss of TSMC (Taiwan Semiconductor Manufacturing Co), during an exchange with CNN. In question? Growing tensions between China and the United States over the Taiwan Strait and the status of the island.
Recent Chinese tensions around Taiwan stem from the tour that Nacy Pelosi, the speaker of the US House of Representatives, is currently conducting in Asia. She has been to Singapore before and is now in Malaysia. She should also travel to South Korea and Japan. And in this program another stage is foreseen: Taiwan.
We have to go back to 1997 to find a visit from a president of the lower house of the US parliament to Taiwan. Since then, no official of such high rank had returned to the island, considered a rebel province by Beijing. Any contact between US representatives and island officials is therefore seen as meddling and a violation of sovereignty.
TSMC factories that would go out of service
It is in this context that Mark Liu, the Taiwanese boss, issued his warnings. A military escalation between Taiwan and mainland China, but also with the United States, could render TSMC inoperative and, therefore, have serious repercussions internationally. The group would then no longer be able to function, for example in the event of an invasion.
TSMC is one of the most advanced semiconductor manufacturers in the world, along with South Korean Samsung and American Intel. These companies are now in the race for 3-nanometer class transistors and are able to supply the market with products with an etch fineness of 5 and 7 nanometers.
Nobody knows if Nancy Pelosi will make a stopover in Taiwan or, if this scenario arises, how China will react. We know that live bullet exercises have been announced near the Chinese coast, facing Taiwan, and we can expect Chinese aircraft forays near Taiwanese airspace to put pressure on the island’s defense.
Without going as far as an invasion of the island, which today is a very implausible prospect, these tensions could give rise to a military slip, due to a bad appreciation on one side or the other. It is also to prevent an incident of this nature – such as an attack on the TSMC facilities – that Mark Liu speaks.
On a technological level, Taiwan has become a strategic hub in semiconductor manufacturing. China, like many countries, has significant needs in this area. And local businesses have yet to achieve the same quality. Semiconductor Manufacturing International Corporation (SMIC) engraves at 14 nanometers.
Speaking, Mark Liu also tries to warn that a forcible takeover of Taiwan would have huge local and international consequences and that China’s gains in the event of victory would not be certain. TSMC, according to Mark Liu, needs to be in constant contact with partners in Asia, Europe and the United States.
An acquisition of TSMC by China would have the effect of rendering industrial production sites inoperative. In short, ” no one can control TSMC by force “Judge Mark Liu. China wouldn’t necessarily be able to get factories back up and running without these external links, but it could still get its hands on research and development.
It is uncertain whether the issue of supplying electronic chips to the world is an audible argument for China to revise its claims on Taiwan downward. The obsession with a single and completely reunited China remains the main compass of power in place. What would happen to TSMC in such a case would certainly be incidental.