TSMC is a key player in the technology industryto the point that although other companies design the chips, it is the manufacturing plants of the Taiwanese company that mass-produce them. integrated at the three-nanometer scale, something they have been working on for quite some time, and which has aroused the interest of many companies that design their chips so that they can then be produced by TSMC.
As well as responsible for the production of 54% of the world chip market, we can say without a doubt that if TSMC suffers some kind of problem, the consequences of it can be global. A recent example of this is found in the incidence of restrictions due to the coronavirus in one of its factories, a fact that could cause a delay of weeks in the arrival of the iPhone 14 Max on the market.
Although TSMC’s headquarters is located in Taiwan (remember that the meaning of its acronym is Taiwan Semiconductor Manufacturing Company), the company has several production plants in China, to which we must add the geopolitical situation between China and Taiwan. In other words, what we could say is the world’s largest chip production company is located, geographically, in a location that is currently stable, but it is not the most reassuring in the world, far from it.
We’ve been here for a long time, in fact, listening to news about possible Chinese plans to invade Taiwan and annex a territory that it historically claims, from the very moment it became independent. And if, until a few months ago, such aggression might have seemed extremely remote, the experience of what happened between Ukraine and Russia has served as a reminder that, in reality, it can happen at any time.
Western interests in TSMC are more than obvious, and dependence on many global tech companies makes China view TSMC as a colossal strategic target. And that this coincides in time with the upsurge in relations between the West, mainly the United States, and China, is not a good sign, not even remotely. Quite the contrary, it should make us start to worry about the future of TSMC.
As we can read in TechSpot, Chen Wenling, chief economist at the China Center for International Economic Exchanges, a government-run entity, said: “If the United States and the West impose destructive sanctions on China like the sanctions against Russia, we must take back Taiwan«. And in an even more concrete way, he added «Especially in the reconstruction of the industrial chain and supply chain, we should take over TSMC«. Little room for interpretation.
The West is critically dependent on Taiwan’s industry, and one would expect that any hostile action by China towards Taiwan would be met by the international community. However, once again the conflict between Ukraine and Russia has shown us that, as the proverb says, there is a long way from saying to doing. And of course, if China decided to take over TSMC and could do so, the consequences could be absolutely catastrophic.
At the moment we are only talking about the opinion of an economist, albeit an economist very well placed in China, but maybe it would be a good time to start drawing up an alternative plan, an option B to fall back on if the time for hostilities came and China took control of TSMC. It is possible to hope that this never happens, that peace lasts, but we live in times in which we can no longer trust that this will be the case.