The largest chipmaker in the world, TSMC, warns that if violence breaks out in Taiwan, shipments may be stopped.
Chairman Mark Liu has warned that if a conflict breaks out between Taiwan and China, the largest and most valuable chip maker in the world, Taiwan Semiconductor Manufacturing Company (TSMC), will become "non-operable." About 90% of the world's advanced chips are produced by TSMC.
"Nobody can forcefully control TSMC... You'll shut down the TSMC factories. Due to their high level of sophistication, these factories are dependent on real-time communication with the outside world, including Europe, Japan, and the US, for everything from supplies to chemicals to spare parts, according to Liu.
Liu also emphasized that if a conflict started, chipmaking would no longer be "the most critical issue we should be worried about."
However, he pointed out that China needs TSMC to keep operating since, in the event of a conflict, "our suspension will generate an economic catastrophe in China because suddenly their most advanced component supply will go." Liu, therefore, exhorts China to "consider carefully."
"The war can only lead to issues on each of the three fronts. Everyone loses in the conflict, he continued, referring to China, Taiwan, and the world semiconductor industry.
As for the ongoing crisis in Ukraine, Liu said that it should serve as a lesson because it has produced a "lose-lose-lose scenario" for the West, Russia, and Ukraine. For the "motor of the international economy to continue humming," he said China and Taiwan should refrain from fighting.
In part because of Nancy Pelosi, the speaker of the US House of Representatives, possibly visiting Taiwan, tensions between Beijing and Taipei are at an all-time high at the time of Liu's interview. Beijing believes Taiwan, an independent island republic, to be a part of its territory. Chinese President Xi Jinping informed his American colleague Joe Biden during a video conversation last week that the US was "playing with fire" by allowing such US delegation visits the region because Beijing viewed them as "intervention by external forces" in its domestic affairs.