Wed, 05 Oct 2022

Singapore, August 5 (ANI): The visit of Speaker of the US House of Representatives, Nancy Pelosi to Taiwan may not be the only reason behind China's angst as the Communist government think that Pelosi not only touched down in Taipei to meet the President of Taiwan, Tsai Ing-wen but also the chairman of Taiwan Semiconductor Manufacturing Company (TSMC), Mark Liu whose firm produces the world's most cutting-edge chips.

Known as the semiconductor king, Mark Liu's company is the world's biggest chipmaker that Americans depend on every day to power their iPhones, medical equipment, and fighter jets whereas China, the world's manufacturing giant, lacks production facilities in these chips, making the reason behind its angst evident.

According to Singapore Post, Mark Liu's company, TSMC is the world's most valuable semiconductor manufacturing company with a USD426 billion market cap.

The chip-manufacturing firm produces the world's most cutting-edge chips.

As per the western media reports, Pelosi and Liu discussed the CHIPs and Science Act that the United States recently passed during their meeting in Taiwan, However, the Taiwanese media said the new legislation includes USD52 billion to support chipmaking in the US, and TSMC will likely be among its beneficiaries as a result of the USD 12 billion chip factory it's planning to build in Arizona.

A chip shortage amid the pandemic delayed production of cars, and TVs and fueled global inflation, however, a larger conflict between Beijing, Taiwan, and the US may lead to further disruption.

The coming together of the world's biggest chipmaker and the world's biggest economy come is likely to strengthen the relations between the two nations, concerning China as the chipmaker is parked in mainland China, just across a narrow strait, on the small island of Taiwan which China claims to be its own.

The US buyers comprised 64 per cent of TSMC's total sales last year, up from 60 per cent two years ago. TSMC's chip sales to American tech giant Apple alone "made up one-quarter of TSMC's revenue last year" which suggests that the US is the company's largest market, The Singapore Post reported.

The data states that the TSMC has of late become "less reliant on revenue from China". The Chinese market makes up 10 per cent of TSMC's revenues, down from 20 per cent two years ago.

Moreover, it is likely to be understood that Pelosi's visit may have opened a new phase for Taiwan-based companies.

According to reports by Singapore Post, the Chinese government reportedly "seized on Taiwan's chip sector as a means of retaliation for Pelosi's visit". Beijing announced that it would "ban the export of natural sand--a raw material used in chipmaking--along with food and other items in retaliation for Pelosi visiting Taiwan".

The departure of Pelosi from Taiwan saw the Chinese demonstrate their anger with a burst of military activity over the waters surrounding the island, summoning the US ambassador in Beijing and halting several agricultural imports from Taiwan.

China is the world's largest semiconductor consumer when it comes to unfinished goods.

Recently, the United States invited South Korea to join its semiconductor alliance "Chip 4" to build a cooperative platform for the semiconductor supply chain. The move came as a shock to China which has dreamt of becoming a leader in semiconductor production by 2030 and is working overtime to enhance its capabilities and production to leave the US behind.

However, the chip 4 alliance has left China worried as the move tends to curb Beijing's growing capabilities as a chip maker. As China is currently dependent on imports for its costly semiconductors demand, the US has deliberately chipped in to curb China's growing capabilities in chip making. (ANI)

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