Impact of China Taiwan Crisis on the Chip Industry

By Thumper
4 Min Read

China is conducting military exercises around US House Speaker Nancy Pelosi’s visit to Taiwan. Nancy Pelosi left Washington last Monday to visit some countries in South Asia. Even though the name of Taiwan is not on tour, he went on a tour to Taiwan in some unexpected way. Around this visit, tension started in China and Taiwan, driving the World in a negative direction daily. And for that, the Crisis in technology in the World is growing daily.

How does Taiwan Crisis is affecting world Technology?

From smartphones to medical devices, Motor vehicles, Fighter Jets, or Commercial air transport systems depend on Chip or Semiconductors. Therefore, the semiconductor industry is now at the centre of strategic and technological competition between China and the United States. So Taiwan is a point of attraction for all. With the tension surrounding the visit of US House of Representatives Speaker Nancy Pelosi to Taiwan, the corporate World is keeping an eye on the Taiwan crisis all the time.

Why is Taiwan much important in this Crisis?

Around 64 per cent of the Semiconductor, industry is under the control of Taiwan. Taiwan Semiconductor Manufacturing Company, TSMC, produces more than half its world requirements. South Korea is in second place with only one-fifth of the production capacity. Again, the chip market of the highest quality, i.e. 7 nanometers or less architecture, is occupied by Taiwan. Again 40 per cent of the export income comes from semiconductors which is 15 per cent of the total GDP. For this semiconductor industry, strategically, Taiwan is much more important than China, Europe and the United States.

How far behind is China in the semiconductor industry?

Though China controls every necessary stuff of the present and Future World, they are far behind in the Semiconductor industry. China controls only 10 per cent of the global market in the semiconductor industry. Semiconductor Manufacturing International Corporation,  SMIF, is fifth in the production of semiconductors, though Not even close to producing the highest quality chips. Recently China has produced 7 nanometres, but it is still considered the primary stage. In other words, Chip produced in China are not as ultramodern as in Taiwan. To reduce the dependency on Taiwan, China has invested over 1.4 trillion dollars in HiTech Industry. China, as World’s second largest economic country, has around  60 per cent of its global chip demand, and 90 per cent of its demand is fulfilled by import. And Taiwan is the leading supplier of this Chip.

The position Of the United States in the Chip industry

On the other hand, Among the most significant 15 chip companies, eight companies are situated in the United States. Among them, Intel is in the first position in terms of sales. In the Modern World, considering the importance of the competition of Chip dependency, United States Congress invested 52 billion dollars in increasing the production of Chips. That will Finance Intel and TSMC to increase the ability to Produce chips.

Now the main question among big companies like Apple, Tesla, and Samsung, is whether there will be a military step over Taiwan or not. And if it causes that, how much will the semiconductor industry push behind, or what could be the alternate solution?

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