With the geopolitical tensions surrounding Taiwan, concerns are growing that the global semiconductor shortage could intensify. The island state plays a central role in the global chip industry. “Thanks to TSMC (semiconductor producer, note), Taiwan is by far the most important country for so-called cutting-edge chips, i.e. the most modern semiconductors currently available on the global market,” said Julia Hess, an expert at the think tank “Foundation New Responsibility “.
fear of blockage
Hess puts Taiwan’s market share in this area at 90 percent. The modern semiconductor products are used, for example, in mobile phones, computers, but also in the field of artificial intelligence or autonomous driving, explained the expert in the field of “technology and geopolitics” at the German foundation in the APA interview.
In addition, Taiwan also produces larger chips, such as those used in the automotive sector or in industry. If you take all semiconductor categories together, Taiwan produces every second chip in the world, according to Hess.
Should China blockade Taiwan or at least disrupt the supply chains, it would be very difficult to compensate for the loss, especially in the cutting-edge area. After the market for the most modern chips had consolidated strongly in recent years, there is now only one competitor besides TSMC with Samsung, says Hess. In contrast to TSMC, the South Koreans would mainly produce their own chips and therefore hardly any capacities would be available for contract manufacturing.
No quick fix
Things are looking a little better for semiconductors used in the automotive industry or in industrial applications. There are certainly producers in Europe and the USA who could compensate for possible bottlenecks. “Nevertheless, you would notice it, as we have already seen with the shortages in 2020,” warned the semiconductor expert.
There is no quick solution to the problem. “It takes several years to expand capacity,” says Hess. In addition, there are often mutual dependencies: The Taiwanese chip industry, for its part, is dependent on Europe and Japan for equipment and chemicals and on the USA for software.