During an interview in Canada on Friday last week. 28, US Secretary of State Antony Blinken said that “China is becoming more aggressive toward Taiwan, a region where maritime trade accounts for 50 percent of daily global trade, and where most of the chips needed for cell phones and other goods are made in Taiwan,” and that “a crisis in the Taiwan Strait would be bad for the world, so security in the strait must be maintained.”
It was the third time that Blinken mentioned the importance of Taiwan’s chips to the global economy, following an ABC interview and a conversation with former US secretary of state Condoleezza Rice.
The international community views Taiwan as having two global advantages that are irreplaceable by any other country:
The first is Taiwan’s strategic position. From the US perspective of its global strategic deployment, Taiwan, surrounded by sea on all sides, is in the center of the “first island chain.” It faces the Taiwan Strait and the Bashi Channel, both important international waters that control the main sea routes of Taiwan, China, Japan, South Korea and the Philippines.
If a war breaks out across the strait, a Chinese Communist Party (CCP) blockade of Taiwan’s maritime shipping routes — which the large military exercises around Taiwan in August seemed to be in preparation for — would not only choke the country’s economic and trade activities, and war supplies, but also affect maritime traffic safety and benefits for other Asia-Pacific countries. Not to mention that it would threaten the US’ overall interests in the Indo-Pacific region.
Second is the importance of Taiwan’s chip technology. Chris Miller — a professor at Tufts University’s Fletcher School of Law and Diplomacy and the author of a new book, Chip War: The Fight for the World’s Most Critical Technology — has said that Taiwan is the “beating heart” of the global semiconductor industry and that if its semiconductor industry were destroyed, the total global economic loss would be greater than the losses caused by the COVID-19 pandemic.
The international status of Taiwan’s semiconductor industry can be attributed to Taiwan Semiconductor Manufacturing Co (TSMC). Data from Taiwanese market research firm TrendForce Corp show that the revenue of Taiwan’s chip foundry accounted for more than 60 percent of global chip foundries in 2020, with TSMC accounting for 54 percent of the total.
Taiwanese chips have become “strategic materials” that are no less important than oil. The world’s telecommunications infrastructure and advanced weapons systems, and artificial intelligence, network systems, smartphones and self-driving vehicles all rely on advanced chips.
From Taiwan’s geostrategic significance and its mass production of high-end chips, a cross-strait war would be a “global chip war.”
As TSMC founder Morris Chang (張忠謀) warned during an interview with CBS’ 60 Minutes: “If there’s a war, I mean, it [TSMC] would be destroyed. Everything will be destroyed.”
A Chinese invasion of Taiwan would be a catastrophe for the global supply chain.
How can Taiwan prevent the Chinese People’s Liberation Army from attacking and destroying the country’s chip production sites? The National Security Council, the Ministry of National Defense, the Ministry of Economic Affairs and other government agencies should jointly study this, setting it as an “operation scenario” in the annual Han Kuang military exercises.
Yao Chung-yuan is a professor and former deputy director of the Ministry of National Defense’s strategic planning department.
Translated by Eddy Chang
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