US says Chinese invasion halting Taiwan chip production would be a global economic blow

A Chinese invasion of Taiwan could potentially halt production by the world's largest advanced semiconductor chip maker, wiping out up to US$1 trillion (about RM4.5 trillion) per year from the global economy per year in the first few years, the top US intelligence official said on Thursday.

US Director of National Intelligence Avril Haines presented what she called a "general estimate" during testimony before the Senate Armed Services Committee.

She noted that the advanced semiconductor chips produced by Taiwan Semiconductor Manufacturing Company Ltd (TSMC) are used in 90% of "almost every category of electronic device around the world."

If a Chinese invasion stopped TSMC from producing those chips, "it will have an enormous global financial impact that I think runs somewhere between US$600 billion to US$1 trillion on an annual basis for the first few years," she said.

"It will also have an impact on our (US) GDP if there was such an invasion of Taiwan and that (TSMC's production) was blocked," Haines continued. "It would also have an impact, if they stopped making chips, on China's economy."