Advanced Taiwan-made chips are an indispensable part of everything from smartphones to washing machines.
If a conflict were to occur in the Taiwan Strait, “it would be disastrous not only for Taiwan, not only for China, but also for the United States, the EU and everyone else,” said Roy Lee, director deputy executive of Chung-Taiwan. hua institute for economic research.
The chaos in global auto manufacturing triggered by a pandemic-related chip shortage over the past year gives some idea of the seriousness of the situation.
“With the shortage of cars, you now have to wait six months for cars made in Europe,” he added. “If Taiwan has stopped supplying chips for other products, you’ll probably have to wait more than 12 months for a new mobile phone, or even longer for a laptop.”
Taiwan’s “sacred mountain”
One Taiwanese company in particular – Taiwan Semiconductor Manufacturing Company (TSMC) – is the world’s largest contract manufacturer of chips and plays a vital role in powering products made by tech companies like Apple, Qualcomm and Nvidia.
The company did not respond to a request for comment from CNN Business.
Super-advanced semiconductor chips – like those produced by TSMC – are difficult to manufacture due to the high cost of development and the level of knowledge required, which means that much of the production is concentrated at a handful of suppliers. .
Should Taiwan fall to communist authorities in Beijing, Western nations could potentially lose access to the island’s valuable semiconductor chips.
Growing Concerns
In recent months, China has stepped up its military pressure on Taiwan, including sending a record number of warplanes nearby last October. Chinese President Xi Jinping has refused to rule out the use of force to achieve what he called “national reunification”.
But as comparisons are drawn between Kyiv and Taipei, the Taiwanese government has repeatedly emphasized the strategic role of its semiconductor industry.
“Taiwan and Ukraine are fundamentally different in terms of geopolitics, geography and importance to international supply chains,” President Tsai Ing-wen said in condemning Russia’s invasion of Ukraine last month. .
Asked about the differences between Taiwan and Ukraine, J. Michael Cole, a Taipei-based senior fellow at the Global Institute Taiwan, said the island’s indispensable role in global supply chains “changes the way countries – the international community – will calculate their response to the threat or invasion of Taiwan.”
China’s Taiwan Affairs Office did not respond to a request for comment.
Upcoming challenges
While Taiwan’s role as a leading semiconductor hub may be indispensable to the world right now, experts say the island faces challenges to maintain its edge.
The global chip supply shortage has already prompted many countries to take steps to break their dependence on Taiwan.
“Right now, China, the United States, and the European Union are all pursuing so-called next-generation semiconductor technologies,” Lee said.
“We understand that challenges come and we must maintain our leadership in semiconductors through research and development and, more importantly, by cultivating skilled talent that supports Taiwan’s success,” he added. .
As talk of Taiwan’s future grows, Lee believes the best way to ensure the island’s security is to fuel a combination of military and economic might.
“This strength comes not only from military strength, but also from economic strength.”
– Will Ripley and Wayne Chang contributed reporting from Taipei, Taiwan.