Taiwan Semiconductor Companies Express Concerns About the Future of Their Industry

By Logan Wamsley

For all of the disruption facing the global semiconductor supply chain in 2022, none arguably have higher stakes than the rising tensions between China and Taiwan. Through the year, the Chinese government has seemingly ratcheted up military pressure on its neighbor, which China has long claimed is a part of China with cultural ties stretching back nearly a millennium. Should such pressure eventually result in direct miliary action, the global implications could be nothing short of catastrophic.

This was touched on this week by Mark Liu, Chairman of Taiwan Semiconductor Manufacturing Company (TSMC), at the annual Taiwan Semiconductor Industry Association convention. “The U.S.-China trade conflict and the escalation of cross-Strait tensions have brought more serious challenges to all industries, including the semiconductor industry,” he said.

The latest sign of these increased tensions, in fact, comes from the U.S., which this month announced a set of export controls. Designed to impede China’s reported escalations of its domestic chip industry, these rules will require U.S. companies to stop supplying Chinese chipmakers with the equipment needed to make advanced chips.

Frank Huang, Chairman of Powerchip Semiconductor Manufacturing Corp., touched on this and added that these tensions between Taiwan, China, and the U.S. do not align with their business goals. “We do business on both sides of the Strait. So we can’t listen to the U.S. and not do any business with mainland China. Then what would everyone eat?” he said. “Our industry’s position is to maintain our competitiveness.”

For the foreseeable future, it will be difficult for manufacturers in the U.S. and abroad to navigate such treacherous geopolitical waters without proven solutions that acquire inventory early in the production process, maintain said inventory over multiple years, and avoid the inevitable market fluctuations as much as possible. For more information about how, contact a Partstat representative today.