Taiwan plays a crucial role in making sure the world gets its cutting-edge technology devices, from laptops to advanced weapons, on time. That’s because the self-governed democratic island of 24 million people is a global leader in the supply of semiconductor chips.But as tensions escalate between Taipei and Beijing, the fate of that industry has become a global concern. Experts have warned that any disruption to Taiwan’s chip supply could paralyze the production of key equipment, impacting almost everyone in the world.The island has been facing growing military aggression from China in recent months. In response, Taiwan has stepped up its own military training, and committed a record amount of defense spending this year. The advanced chips Taiwan makes are an indispensable part of everything from smartphones to washing machines.If conflict were to happen on the Taiwan Strait, “it will be disastrous not only for Taiwan, not only for China, but also for the US, EU, and everyone else,” said Roy Lee, a deputy executive director at Taiwan’s Chung-hua Institution for Economic Research. “With the auto shortage, now you have to wait for six months for European made cars,” he added. “If Taiwan stopped supplying chips for other products, then probably you have to wait for over 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 critical role in powering products designed by tech companies like Apple, Qualcomm and Nvidia.With a market cap of nearly $500 billion, TSMC is one of Asia’s most valuable companies, and accounts for 90% of the world’s super-advanced chips, Reuters said in a recent report citing industry estimates.The firm — widely dubbed in Taiwan as its “sacred mountain” — is so important to the island that its employees can apply to be exempted from military reservist training — even if they are called upon, the defense ministry has said.The company did not respond to a request for comment by CNN Business.Super-advanced semiconductor chips — like the ones produced by TSMC — are difficult to make because of the high cost of development and the level of knowledge required, meaning much of the production is concentrated in just a handful of suppliers.
