Xi handed ‘trump card’ as Taiwan export ban could trigger Apple shortages: ‘Disaster!’ | Science | New

Last week America’s top Democrat by Nancy Pelosi visit to Taiwan provoked the fury of China, which considers the island a separatist province and part of its sovereignty. In retaliation, Beijing began holding live-fire military exercises near the island and also hit Taipei with economic sanctions. Chief among these sanctions was a ban on the export of natural sand, which is crucial for the manufacture of semiconductors.

A semiconductor chip is an electrical circuit forming a crucial component of a wide range of technological devices, ranging from 5G technology to computers, cars and gaming hardware.

Semiconductor manufacturing is essential to Taiwan’s economy, accounting for around 15% of its GDP and almost 40% of its exports.

Taiwan also leads the world in semiconductor exports, accounting for 64% of global manufacturing revenue according to TrendForce.

Given the critical importance of Taiwan’s exports in global trade, Reuters columnist Gina Chon warned that Chinese Premier Xi Jinping could hold those exports hostage if tensions escalate.

She wrote: “If tensions between China and Taiwan continue to escalate, the People’s Republic has a trump card: threatening to cut off the island’s exports, which include products from pivotal chipmaker TSMC, formerly known as the name of Taiwan Semiconductor Manufacturing.

She noted that apart from these initial sanctions and military exercises, “the People’s Republic may threaten to retaliate further.

“A naval blockade and a no-fly zone, for example, could in theory prevent major Taiwanese products from traveling around the world.

“Isolating or disrupting TSMC would be another disaster for the global economy.

READ MORE: Xi’s dreams shattered as Biden signs bill to help end chip shortage

“As tensions escalate into threats that can have real consequences, China holds a big chip in its hand.”

The loss of semiconductors from Taiwan would be devastating for the United States, as the Biden administration’s 100-Day Supply Chain Review Report says: “The United States is highly dependent on a single company – TSMC – to produce their state-of-the-art chips”.

The fact that only TSMC and Samsung (South Korea) can manufacture the most advanced semiconductors (five nanometer size) “jeopardizes the ability to supply current and future products. [US] national security and critical infrastructure needs”.

To end this dependency, the United States attempted to attract TSMC to the United States to increase domestic chip production capacity.

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