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There may soon be a global semiconductor shortage

While Nancy Pelosi’s visit to Taiwan yesterday caused an earthquake in international relations, the world has turned its eyes to the critical situation in Asia as it could well cause a global semiconductor shortage.

Nancy Pelosi, the Speaker of the United States House of Representatives, visited Taiwan yesterday, a visit closely watched online as more than 300,000 people attended to follow the flight on FlightRadar24. Beijing interprets this visit, a first in 25 years, as a sign that the United States is against the “one China” policy, and relations between the two countries are now at an all-time low.

A war in Asia for control of Taiwan could not only damage global relations, but most importantly lead to an unprecedented global shortage of semiconductors. The technology market would then be much more paralyzed than we have experienced over the past two years due to the COVID-19 pandemic. As a reminder, the smartphone market is in free fall, sales of Sony’s PS5 are disappointing and graphics cards are only now beginning to find attractive prices.

TSMC warns of the risks of a war between China and Taiwan

Taiwan Semiconductor Manufacturing Company (TSMC) chairman Mark Liu has warned that economies on both sides of the Taiwan Strait will be in turmoil if China invades Taiwan. Indeed, in an interview, Liu said that if China invades Taiwan, the chip factory will not be able to operate as it relies on global supply chains.

“No one can control TSMC by force,” said Liu. “If you undertake a military force or an invasion, you render the TSMC factory useless”. “Being a state-of-the-art manufacturing facility, it relies on real-time communication with the outside world, with Europe, Japan and the United States, whether for materials, chemicals, parts or engineering and diagnostic software,” he says. According to him, as in all wars, there would be “no winners” if such a conflict arose, China, Taiwan and the West all lose.

This scenario would have repercussions outside the semiconductor industry, leading to the “destruction of the rules-based world order”. Last year, Taiwan produces over 60% of the world’s semiconductors. Liu, therefore, urged all parties to find ways to avoid war so that the “motor of the world economy can continue to run”. China would have no interest in destabilizing TSMC, as the country is also dependent on its founder. According to the company, China represents 10% of its activity. The president clarified that TSMC only works with the Chinese consumer market, not the military. It is hoped that the geopolitical situation in the region will calm down.

A conflict between China and Taiwan could delay the release of the next smartphones

As you will have understood, many countries, including China, would suddenly find that their most advanced components would no longer be available if TSMC stopped production. The world would then be faced with an unprecedented chip shortage., which will delay or cancel the release of several smartphones.

Among them, we can mention in particular all the smartphones that had to use components from TSMC. That is in particular the case of the Xiaomi 13, including in particular the Xiaomi 13 Ultra that will arrive in France in 2023, or the Galaxy S23, which should only use the next Snapdragon 8 Gen 2 from Qualcomm.

In case of war, Qualcomm will have to entrust the production of the chip to Samsung, but the consumer may not like the decision. Indeed, high-end 2021 Android smartphones equipped with a Snapdragon 8 Gen 1 tended to heat up a lot due to the Samsung burn. Regardless, the US now hopes to move some of TSMC’s production outside of Taiwan. In this regard, the US Congress last week passed a $52 billion financing bill, which should help TSMC and Chip Giant Intel Corporation Expand Their Manufacturing Operations in America.

Brain Curry

Brian is the news author at Research Snipers which mainly covers Technology News, Microsoft News, Google News, Facebook, Apple, Huawei, Xiaomi, and other tech news.