Thursday, May 19, 2022

Taiwan’s chips too vital for war, says island’s major chipmaker

Taiwan's TSMC, the world's largest contract chipmaker is at the centre of global efforts to resolve chip shortages.

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Nobody wants to see a war over Taiwan because nobody wants to disrupt the crucial global supply chain of semiconductors, the chairman of major chipmaker TSMC said on Thursday, in unusually direct comments about geopolitics.

Tensions over the past year or so have risen around Taiwan as China seeks to assert its sovereignty claims, with repeated military drills near the island that have caused concern in Washington and other Western capitals, reports Reuters.

Mark Liu, Taiwan Semiconductor Manufacturing’s chairman, told an earnings call that the pandemic has already been disruptive enough for the global economy and no country wants to see instability around Taiwan.

“As to an invasion by China, let me tell you, everybody wants to have a peaceful Taiwan Strait. Because it is to every country’s benefit, but also because of the semiconductor supply chain in Taiwan – no one wants to disrupt it.”

TSMC, the world’s largest contract chipmaker and a major Apple supplier, is at the centre of global efforts to resolve chip shortages that have in some cases shuttered car manufacturing plants and affected consumer electronics.

The US government has been pressing TSMC and other Taiwanese chipmakers to do more to ease the chip shortage, especially for carmakers.

Asia’s most valuable manufacturing company tends to try and stay out of politics, though it has large business interests in both China and the US and has to ensure it does not upset either government.

TSMC, which has a market capitalisation of US$567 billion, more than double that of US chipmaker Intel, announced in May last year it would build a US$12 billion factory in the US state of Arizona, an apparent win for the then-Trump administration in its push to wrestle global tech supply chains back from China as part of a broader China-US trade war.

Liu said that under the Biden administration, geopolitical developments were “more predictable, more rules-based”.

TSMC signed a deal this week to import Covid-19 vaccines from BioNTech SE, with another Taiwanese tech giant and Apple supplier, Foxconn.

Taiwan’s government allowed the two to negotiate on its behalf following public pressure about the slow pace of vaccinations, and after Taipei blamed Beijing for blocking an earlier deal with the German firm, which China denies.

“This could be political in the beginning, but in the end we completed the contract and we did get support from all sides, so I don’t think at the end it was as political anymore, otherwise this donation wouldn’t be successful,” said Liu.

Once they arrive, the vaccines will be donated to the government for distribution.

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