Taiwan produces most of the world’s advanced process chips, and it is also where the world’s leading foundry TSMC is located. (Schematic diagram: TSMC chip) Figure: Taken from TSMC official website
The geopolitical challenges facing the semiconductor industry are increasing day by day, and it is difficult for the world to quickly get rid of its dependence on Taiwan’s high-end chips. After China raised its military intimidation against Taiwan in August, the industry began to assess the risk of war in Taiwan, the global chip production base. From drafting contingency plans to exploring manufacturing capacity outside Taiwan, some companies are weighing how to respond should China attack or block Taiwan, according to 15 top semiconductor executives interviewed by Reuters.
The Reuters report, citing the executives, said that although Taiwan has been under threat from China for decades and tensions occasionally intensified, the military drills that followed US House Speaker Nancy Pelosi’s visit to Taiwan in early August were a real challenge. Man’s nerves are tense. The senior executives interviewed, concerned about the relationship with China, asked not to be identified and company names.
Taiwan produces most of the world’s advanced process chips, and is also the location of Taiwan Semiconductor Manufacturing Co., Ltd., the world’s leading foundry, and TSMC is also home to Apple Inc. and chip maker NVIDIA Corp. As well as suppliers of internationally renowned manufacturers such as wafer design company Qualcomm Inc. Wafers are vital to the production of everything from iPhones, washing machines, cars to fighter jets.
The interviewed executives emphasized that it is difficult for the world to quickly wean itself off its dependence on Taiwan’s high-tech chips, but the geopolitical challenges facing the semiconductor industry are increasing day by day, and business continuity plans (BCPs) are currently being discussed. “A small number of companies have only recently started to formulate these plans. As far as I know, most of them are foreign companies,” said Cao Shilun, president of the Taiwan region of the International Semiconductor Industry Association.
In a survey conducted by the American Chamber of Commerce in Taiwan a week after Pelosi’s visit to Taiwan, 40 percent of respondents said their companies have begun to revise or prepare to revise their crisis response or business continuity plans in Taiwan. A senior executive of a large foreign chip company with operations in Taiwan mentioned that customers asked about their company’s business continuity plan, so they turned to Taiwanese suppliers to ask the same question, saying, “No one has ever really Any type of military action has been highlighted in the business continuity plan, but they have to do it now.”
China’s military exercises have created unrest, highlighting the possibility of a blockade of Taiwan, and management has begun to plan for supply disruptions or other scenarios. The executive said frankly: “I don’t think anyone thinks the political environment will get better.” Some people are optimistic that the chip industry will provide a “silicon shield” for Taiwan, making it unlikely that China will try to seize Taiwan by force, and the United States is not willing to allow it. Taiwan falls into Chinese hands. While downplaying the theory, the Taiwanese government has tried to avoid weakening the semiconductor industry, the lifeblood of the economy.