The conflict over Taiwan is threatening the world’s electronic supply chains. Taiwan is the biggest producer of the world’s most advanced chips, and a blockade there could halt shipments of the microchips that companies need to make phones and drones, set up supercomputers and cellular networks, and even build new weapons.
Tech companies around the world rely heavily on advanced chips from Taiwan Semiconductor Manufacturing Company (TSMC), Taiwan’s biggest chip maker, turning it into a vital strategic asset for both Washington and Beijing. A military conflagration would damage the world’s digital infrastructure.
A web of dependencies helps keep the peace. China’s reliance on TSMC and other Taiwanese chip companies deters the Communist Party from invading the island. The U.S. dependence on the same know-how lends additional credibility to Washington’s military support for Taiwan. Not for nothing do people in Taiwan call TSMC their “sacred mountain, protector of the nation.”
Despite China’s heavy national investment in semiconductors to break a dependence on global chips, the country’s leader, Xi Jinping, seems unhappy with the results.