Experts fear that China is eyeing control of TSMC with a Taiwan takeover
The answer is Taiwan Semiconductor Manufacturing Company LTD better known as TSMC. The foundry manufactures chips for some of the biggest and most important names in tech including Apple, AMD, Intel, NVIDIA, MediaTek, Qualcomm, and more. We’ve already seen what happens when there is a global chip shortage so you can imagine what might take place if the Chinese attempt to take over Taiwan and end up controlling the world’s largest foundry.
What would happen to the global economy if China was able to take control of TSMC?
Taiwan produced 63% of the world’s semiconductors in 2019 compared to the 12% share belonging to the U.S. Last year, China delivered 16% of the world’s semiconductors.
Furchtgott notes that “The Chinese economy depends on commercial relationships. But, he added, “America’s dependence on China for various critical goods gives China something close to a veto power over certain foreign policy decisions.” Ah yes, leverage.
90% of the world’s advanced chips come from TSMC
Representative McCaul expects the worst from China should it get its hands on TSMC. “They’ve shown they’re willing to disappear people, silence speech and harm countries economically,” he said. “The more leverage the CCP (Chinese Communist Party) has, the more willing they are to use it in a lot of creative ways.”
What keeps some U.S. lawmakers up at night is the statistic showing that 90% of all the advanced chips in the world are shipped from TSMC. Now imagine if the CCP had control over those chips. Isaac Stone Fish, CEO of China-focused risk firm Strategy Risk says, “A Chinese war with Taiwan, whether a success or a failure, would be certainly the most important event of the 21st century.
Fish added that “Preventing World War III, preventing Beijing from harrying and exerting far more military power over Japan, South Korea, the Philippines, stymieing the external growth of China. All these things seem more important than supply chain disruptions. Diversification isn’t just for the supply chain shortage,” he added. “It’s the national security downside of being too reliant on Taiwan.”
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