Categories: Tech

Will Its “silicon Shield” Protect Taiwan From China? | Voice Of America

TAIPEI, TAIWAN – The global shortage of semiconductors or microchips: the “Brain” in all electronic devices, has increased the geopolitical importance of Taiwan and its chip manufacturing sector. The island is home to the world’s largest contract chip maker – Taiwan Semiconductor Manufacturing Co (TSMC). Many describe Taiwan’s strength in microchips as its “silicon shield”, which can protect it against Chinese aggression. But others suspect that the sector, coveted by China, may also cause China to accelerate its efforts to harness Taiwan’s technological prowess. “Don’t Let War Happen” When asked to explain the shield, TSMC President Mark Liu told CBS News’s “60 Minutes” program last week that it means “everyone needs the support of Taiwan’s high-tech industry. ” So they will not allow war to happen in this region because it is against the interests of all the countries of the world. “Global semiconductor shortage improves Taiwan’s negotiating position When negotiating any trade issue, Taiwan has an advantageous position over Washington. Taiwan is one of the largest manufacturers of semiconductors and microchips, which are in short supply. The United States needs them for the automotive and sanitary equipment industries, among others. Although he declined to comment on whether the industry will keep Taiwan safe, Liu added that he hoped no war would occur there. It is widely believed that any war fought in Taiwan could disrupt global microchip supply chains. More than 1 billion chips are currently being produced annually. Industry watchers, including the National Bank of Canada, previously estimated that TSMC alone accounts for a fifth of global chip production and up to 90% of the supply of the most advanced chips. In an “extremely hypothetical scenario,” such a disruption to Taiwan’s chip production could cause $ 490 billion in annual losses for electronic device makers worldwide, according to estimates from the Semiconductor Industry Association based in America last month. All shut down American tech giants including Apple, major European automakers and even Chinese companies would have to halt production in the event of a TSMC collapse, said Frank Huang, president of Taiwan’s third-largest chipmaker Powerchip Semiconductor. Manufacturing Corp. US imposes more sanctions on China and authorizes arms sales to Taiwan The two measures are part of the US policy of defending democracy promoters in Hong Kong and supporting Taiwan, which Beijing considers a “rogue province”. That, he said, will make China think twice about using force against Taiwan, the autonomous island that Beijing considers a rogue province. “China likes… to threaten Taiwan. But realistically without Taiwan, they can’t move either. Their semiconductors also turn off. So the problem is: can you take over Taiwan without [desencadenar] an impact [en] semiconductors? That is not going to happen, ”Huang told VOA. The term “silicon shield” was first coined by Craig Addison in late 2000, who argued in his book “Silicon Shield: Protecting Taiwan Against Chinese Attack” that the island’s rise as the key supplier of the The global digital economy would serve as “a deterrent against possible Chinese aggression.” A brochure asking employees to protect company confidentiality is seen at a reception at the Taiwan Semiconductor Manufacturing Co (TSMC) in Hsinchu, Taiwan on August 31, 2018. The debate over such deterrence has heated up now that the pandemic has severely disrupted most supply chains. The United States has also placed restrictions on exports of American-engineered chips and chip-making equipment to China, a development that some observers also fear could end up prompting China to increase aggression toward Taiwan. But Darson Chiu, a researcher at the Taiwan Institute of Economic Research (TIER) in Taipei, disagreed, saying he believes the world will back Taiwan. “The world’s superpowers will see TSMC as a key driver behind the future global economic revival, belonging to no one but the world. Therefore, the world will not tolerate China’s use of force to control TSMC, ”Chiu told VOA by phone. Double layer of protection The island’s dominance in chipmaking has fueled the debate over its silicon shield, but the United States is more concerned that the shield may “have holes” and the technology is being used by China’s military. according to Alexander Neill, a former Shangri-La Dialogue Principal Investigator for Asia Pacific Security at the International Institute for Strategic Studies. Will the US make a clear commitment to defend Taiwan from a Chinese attack? Almost 70 years have passed, and the United States has never made a clear commitment to defend Taiwan from a Chinese invasion. Its policy has been one of “strategic ambiguity.” But some analysts suspect that an invasion could be very close and that the United States may not be prepared to repel it. An earlier Washington Post report alleged that a Chinese company had used TSMC chips in the development of hypersonic missiles by the Chinese military. But the company denied the charges. The United States is also concerned about vulnerabilities caused by the concentration of TSMC production in Taiwan. The shortage of water and electricity supplies on the island could disrupt production. “What the United States wants to do is help TSMC diversify its production base so that there is a double layer of protection. So if the first shield is being penetrated, the second shield [de refuerzo] it is nurturing the chip production base in friendly and allied countries, including the United States, ”Neill explained to the VOA by phone. Increased Demand TSMC has planned to invest $ 100 billion over the next three years in new production facilities, including a state-of-the-art wafer manufacturing facility in the US state of Arizona and in expanding its factory. based in Nanjing, China, to produce 28 nanometer chips for automakers. The move aims to increase TSMC’s capacity, which is currently operating at full capacity, to meet growing demand and support future growth in the global economy, TIER’s Chiu said. In a stock presentation last month, TSMC noted that it is “entering a period of increased growth as the multi-year megatrends of 5G and HPC (high performance computer) are expected to drive strong demand for our semiconductor technologies in the US. next years. In addition, the COVID-19 pandemic also accelerates digitization in all respects. “But Powerchip’s Huang wonders whether wafer factories abroad will be as profitable as those based in Taiwan. He said many factories in the United States and Germany have turned out to be too expensive to maintain. Expansion in China For years, China’s attempts to make chips have failed as China lacks access to the intellectual property required for the process. Therefore, TSMC’s expansion plan at its Nanjing plant is welcomed by many in China despite concerns that the survival of local chipmakers may be threatened by the Taiwanese chipmaker, according to Song Hong, deputy director general of the Institute for World Economy and Policy. at the Academy of Social Sciences. “28nm chips are not high-end. But mid- to low-end chips are in higher demand. So I think this shows TSMC’s optimism on China’s future demand. We are hopeful to boost homegrown chipmakers, but we also welcome competition, ”Song told VOA. Song, however, shrugged off the geopolitical implications of Taiwan’s silicon shield, saying that China views Taiwanese problems as internal affairs and will not be deterred from its goals by US action. Connect with the Voice of America! Subscribe to our YouTube channel and activate notifications; or, follow us on social networks: Facebook, Twitter

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