In a statement underscoring the precarious nature of international trade and security, a U.S. official emphasized the critical consequences if China were to take control of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading semiconductor manufacturer.
It would be absolutely devastating,
the official said, pointing out the United States’ significant dependence on TSMC for its supply of advanced semiconductor chips.
The official highlighted,
Right now, the United States buys 92% of its leading-edge chips from TSMC in Taiwan.
This dependency underscores the strategic importance of TSMC in the global supply chain and the potential risks to U.S. technology and defense sectors should access to these crucial components be disrupted.
TSMC is the largest semiconductor manufacturer globally, holding a pivotal position in producing chips used in everything from consumer electronics to critical infrastructure. The firm is at the forefront of advancing semiconductor technology, with capabilities currently unmatched by other manufacturers, particularly in producing the most minor and efficient chips.
The scenario of China taking control over Taiwan and, by extension, TSMCstems from the longstanding tensions between China and Taiwan, which Beijing considers a renegade province. Such an event could lead to significant disruptions in the global supply chain, significantly affecting the technology and automotive industries, which are already experiencing chip shortages due to the COVID-19 pandemic.
The implications of a Chinese takeover of TSMC would extend beyond economics and trade. It would have profound geopolitical consequences, potentially triggering a severe international crisis involving the United States, its allies, and China. The U.S. has long been committed to supporting Taiwan’s defense capabilities against potential aggression from the mainland.
The U.S. government has been actively seeking ways to bolster its semiconductor capabilities in response to these potential threats. Initiatives include significant investments in domestic chip manufacturing and developing partnerships with other countries to reduce dependency on single sources.
Industry experts warn that the loss of access to TSMC’s cutting-edge technology would not only damage the U.S. economy but also weaken its technological competitiveness on the global stage. In light of these concerns, the situation in Taiwan remains one of the most delicate and potentially destabilizing geopolitical issues today.
Source: yahoo!finance May 9, 2024
