Will Taiwan tensions lead to a new chip crisis?

5 mins read
Will Taiwan tensions lead to a new chip crisis?

Taiwan, one of the world’s most important chip manufacturers, and the possible sanctions that may be imposed in the US and China triangle may have difficult consequences for the global economy, which is already tired of the pandemic and the Russia-Ukraine war.

Taiwan, which produces more than 2/3 of the microchips that form the basis of many devices and technologies from computers to smartphones, airplanes to electric vehicles, assumes a vital function for the world economy

One of the critical issues that brought Taiwan to the agenda of the world public opinion recently was the “microchip crisis” triggered by the technological competition between the US and China, deepened by problems in supply chains.

The US-China tension, which escalated with the visit of Pelosi, Speaker of the US House of Representatives, raised the question of whether it would lead to a new crisis.

‘chip production’ warning from TSMC

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s most advanced chipmaker, makes processors for American companies, including Apple and Qualcomm. It makes Apple’s A-series and M-series chips and has more than 50 percent of the world’s semiconductor foundry market.

After tensions escalated following a visit by US House Speaker Nancy Pelosi, TSMC, one of Apple’s and the world’s largest chipmaker, warned the world that everyone loses in Taiwan-China tensions. In an interview this week, TSMC President Mark Liu said that if Taiwan is invaded by China, the chipmaker’s factory would not be able to operate because it depends on global supply chains. Liu continued: “No one can control TSMC by force. If you take a military force or invasion, you will render the TSMC factory inoperable. Because this is a very sophisticated manufacturing plant, it depends on real-time connectivity with the outside world, with Europe, with Japan, with the US, from materials to chemicals, spare parts, engineering software and diagnostics.”

China halts trade in some products with Taiwan

The plane carrying US Speaker of the US House of Representatives Pelosi and the accompanying 5-person Congressional delegation arrived in Taiwan despite China’s threats, including military response. Pelosi said in a statement during the visit, “US solidarity with Taiwan is vital. Our visit clearly demonstrated that the United States has not abandoned its pledge of support for Taiwan.” The Chinese Foreign Ministry condemned the visit. China’s People’s Liberation Army (PLA) launched a large-scale military exercise. As the political statements continued to come one after another, China halted the import of citrus fruits and two types of fish from Taiwan in a decision that can be characterized as economic sanctions.

Taiwan’s economic importance

Located in the center of the region, which is the route of about one-third of world trade, Taiwan is one of the rising Asian economies, called the “Asian tigers” with Singapore, Hong Kong and South Korea, with its rapid development since the 1960s.
Taiwan’s economy is largely based on industrial production and exports. Providing about 70 percent of its total income from exports last year, Taiwan’s main export products are electronic parts with a share of 38.5 percent, microchips with 34.8 percent, communication devices with 13 percent and metals with 8 percent. Taiwan exports 42 percent of its exports to China and Hong Kong.

Sanctions are a new threat to the global economy

It is stated that possible sanctions that may be activated in the triangle of Taiwan and the US and China, one of the largest economies, may have difficult consequences for the global economy, which is already tired of the pandemic and the Russia-Ukraine war. Analysts emphasize that Taiwan is the world’s most important chip manufacturer, and considering the size of the Chinese and US economies, the introduction of mutual economic sanctions between these three countries would be a major threat to the global economy, which has not recovered after the pandemic and recession expectations have increased.


The ancient idea tries to provide the most accurate information to its readers in all the content it publishes.

Fatal error: Uncaught TypeError: fclose(): Argument #1 ($stream) must be of type resource, bool given in /home/fikrikadim/public_html/wp-content/plugins/wp-super-cache/wp-cache-phase2.php:2381 Stack trace: #0 /home/fikrikadim/public_html/wp-content/plugins/wp-super-cache/wp-cache-phase2.php(2381): fclose(false) #1 /home/fikrikadim/public_html/wp-content/plugins/wp-super-cache/wp-cache-phase2.php(2141): wp_cache_get_ob('<!DOCTYPE html>...') #2 [internal function]: wp_cache_ob_callback('<!DOCTYPE html>...', 9) #3 /home/fikrikadim/public_html/wp-includes/functions.php(5420): ob_end_flush() #4 /home/fikrikadim/public_html/wp-includes/class-wp-hook.php(324): wp_ob_end_flush_all('') #5 /home/fikrikadim/public_html/wp-includes/class-wp-hook.php(348): WP_Hook->apply_filters('', Array) #6 /home/fikrikadim/public_html/wp-includes/plugin.php(517): WP_Hook->do_action(Array) #7 /home/fikrikadim/public_html/wp-includes/load.php(1270): do_action('shutdown') #8 [internal function]: shutdown_action_hook() #9 {main} thrown in /home/fikrikadim/public_html/wp-content/plugins/wp-super-cache/wp-cache-phase2.php on line 2381