The Chinese People’s Liberation Army launched a military exercise around Taiwan, and 11 Dongfeng missiles landed in the northern, eastern and southern waters of the island. Taiwan is “blocked”, and the world may have to pay for Pelosi’s visit to Taiwan.
Bloomberg reports: “If the mainland exercises disrupt Taiwan’s semiconductor shipments, it will create new troubles for the global economy.” However, the truly worrying tensions in the Asia-Pacific region have dampened market confidence, and demand in the electronics supply chain is currently weakening. In addition to the new crown epidemic and the military conflict between Russia and Ukraine, US Senate President Nancy Pelosi recently ignored the Chinese side’s stern warning that her visit to Taiwan and the “independence” government’s campaign aroused the anger of various departments in China and the people across the country. The fiery airflow may be difficult to dissipate for a while, and the global industry has to make more conservative decisions.
The latest numbers were very weak, with the Purchasing Managers’ Index (PMI) showing that Taiwanese manufacturing production and demand slumped in June-July and new export orders fell sharply. South Korea, another export powerhouse, also struggled, with PMIs showing a contraction in manufacturing in July. About a year and a half before that, its exports were growing at double-digit rates.
“Nikkei Shimbun” said that the inventory of electronic parts companies in Japan is increasing, and the slowdown in smartphone shipments and restrictions on automobile production are also blowing headwinds. Market research firm IDC estimates that global shipments of smartphones fell nearly 9 percent year-on-year from April to June this year, while PCs fell by more than 15 percent. According to industry insiders, this is due to the disjointed and chaotic supply chain caused by China’s epidemic control. The main parts made in China cannot be supplied downstream, especially in the semiconductor industry. As a result, automobile manufacturing has been shut down and sales have been hit. Therefore, the factory has no choice but to cut back further. Costs and Sales Expectations.
During Pelosi’s visit to Taiwan, the so-called “Pelosi cyclone” occurred in Taiwan, but the market expects that the mainland’s countermeasures will be severe, and Taiwan’s economy has become gloomy after Pelosi’s cyclone. Trade statistics show that the mainland accounts for 40% of Taiwan’s exports and 20% of its imports. The mainland has a lot of leverage over Taiwan.
Liu Deyin, chairman of TSMC, was interviewed by CNN. When asked about the influence of the mainland’s attack on Taiwan, he emphasized: “There are no winners, everyone is a loser.” In the past, the analysis of international current affairs focused on the mainland’s military system, which is to make semiconductors on the island. Owning industrial facilities, among which TSMC, which has leading process technology and production capacity accounting for more than half of the global market, is an obvious target. Therefore, Liu Deyin wants to carry out “expectation management” on the mainland, indicating that this is not the way to go.
However, the situation on both sides of the Taiwan Strait has changed because of 11 Dongfeng missiles, and the fate of TSMC will never be the same again: don’t let someone occupy your plant and equipment, and there is no need to rob you of your technology. Please focus on production with peace of mind. However, Taiwan’s chips may not be exported in the future. , exports can go, the market demand is also greatly reduced than before. How does the United States react to the situation in Taiwan?
“Voice of America” reported: “So far, the U.S. military has not taken any action against China’s “Ring Taiwan” military exercise.” However, citing the suggestion of a think tank with a background in the U.S. military: “First, the U.S. should increase the Send two aircraft carrier strike groups into the Philippine Sea to bring Taiwan under protection so that the PLA does not dare to jeopardize U.S. air control over eastern Taiwan. Second, send more submarines to the western Pacific. It should establish a submarine cordon in northern and southern Taiwan , as many submarines as possible — preferably twenty; and third, rebuilding the U.S. Taiwan Defense Command, linking military officials from the U.S., Taiwan, Japan, and other allies in the Asia-Pacific to coordinate their efforts in the event of a war with China actions of the side.”
This American friend, are you serious? I actually wanted to say: Are you a certified “unlocking” expert? The chips required by the major industries in the United States mainly rely on Taiwan. The US economy is in recession and it depends on improving Sino-US trade relations. The Taiwan card is now dominated by China.