Source : coinspeaker.com
House Speaker Nancy Pelosi’s visit to Taiwan has moved Beijing to ramp up its military presence in the waters around the island nation.
The visit of US House Speaker Nancy Pelosi to Taiwan may be over, but the impact of the Asian tour is bound to remain for much longer.
Nancy Pelosi’s visit to the highly contested island underscores the country’s importance in the global semiconductor and foundry industry as the visiting team had a meeting with the country’s largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC) or Taiwan Semiconductor Mfg. Co. Ltd (TPE: 2330).
TSMC plays a very crucial role in the chipmaking industry and it counts the likes of Apple Inc (NASDAQ: AAPL), NVIDIA Corporation (NASDAQ: NVDA), and the majority of the world’s largest technology companies. In reality, the global chipmaking shortage is being aggravated in part because of the geopolitical tension between China and Taiwan, and the US involvement in it.
“Taiwan’s unresolved diplomatic status will remain a source of intense geopolitical uncertainty. Even Pelosi’s trip underlines how important Taiwan is for both countries,” Reema Bhattacharya, head of Asia research at Verisk Maplecroft, told CNBC’s “Street Signs Europe” on Wednesday. “The obvious reason being its crucial strategic importance as a chip manufacturer and in the global semiconductor supply chain.”
According to data from Counterpoint Research, TSMC accounts for 54% of the global chip market while the company, when compared with the other competitors in the country, accounts for as much as two-thirds of the foundry business. The United States has been doing all it can to back the production efficiency of TSMC, and through the introduction of strategic policies, the United States government is giving the company a competitive edge over its Chinese counterparts.
Besides TSMC, Samsung Electronics Co Ltd (KRX: 005930) also comes off as the known Asian company that has the cutting-edge expertise to manufacture semiconductors at scale, but Nancy Pelosi’s visit to TSMC underscores how relatively indispensable the company is.
House Speaker Nancy Pelosi’s Visit May Hasten TSMC to Pick Sides
House Speaker Nancy Pelosi’s visit to Taiwan has moved Beijing to ramp up its military presence in the waters around the island nation. While China considers Taiwan as a mutineer which needs to be reunited with the mainland, Taiwan has been operating as an independent nation for quite some time and is looking to resist attempts of a takeover.
The tension is stoking remarkably, and before things get out of hand, TSMC may be forced to pick sides between China and the US.
The firm is currently constructing a $12 billion factory in Arizona where it plans to be making very advanced semiconductors. While the firm has 2 factories in mainland China, the sophistication and plans for the Arizona outfit suggest the firm might have picked whose side it wants to be on should there be any escalation with China.
“In fact, a company like TSMC has already ‘picked sides.’ It’s investing in the US to support American chip making, and has said it wants to work with ‘democracies,’ like the EU, on chip making,” said Abishur Prakash, co-founder of advisory firm the Center for Innovating the Future
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.