TAIPEI: During her whirlwind tour of Taiwan, US House Speaker Nancy Pelosi didn’t just discuss geopolitics with the country’s Asian political leaders; But also the business of the island’s most valuable company, Taiwan Semiconductor Manufacturing Company, also known as TSMC.
Pelosi’s meeting with TSMC chairman Mark Liu on Wednesday highlighted the chipmaker’s growing technological weight in the global economy. From aerospace to consumer electronics, the world relies heavily on TSMC semiconductors in almost all sectors.
TSMC is located in the Hsinchu Science Park in northwestern Taiwan, and even a small disruption in the company’s production is, for example, bound to stop the assembly lines of the global car industry, with thousands of workers worldwide. all. But how did one company product become indispensable? Established in 1985, Hsinchu Science Park is divided into six satellite parks – Hsinchu, Zhunan, Tonglu, Longtan, Yilan and Hsinchu Biomedical Park – and employs approximately 150,000 people. Its most important sector is the integrated industry, which represents 70% of the total value of the farm. Taiwan’s Silicon Valley, as the area is also called, is about 150 kilometers (93 miles) from mainland China. It has also successfully spawned businesses in other technology sectors such as telecommunications, optoelectronics, precision machinery and biotechnology.
Hsinchu’s 20 chipmakers – led by TSMC and UMC – are the world’s largest contract manufacturers of semiconductors. TSMC, for example, is the exclusive supplier of silicon manufacturers for Apple’s iPhones and Mac PCs, as well as a manufacturing partner for other US companies such as AMD, Broadcom and Qualcomm. In apparent retaliation for Pelosi’s visit to the island, China on Wednesday suspended some trade with Taiwan, further escalating tensions between Taipei and Beijing over the island’s self-governing status. Under its “One China” policy, Beijing has refused to recognize Taiwan as an independent country for more than half a century. In a rare interview given by the chairman of TSMC, Mark Liu told CNN on Monday that in a war between China and Taiwan, everyone will lose. “If you take an army or an invasion, you will make the TSMC factory inoperable,” he said, adding that TSMC’s modern headquarters “is connected to the real world outside,” and that “no one can control TSMC by force.”
Many of the world’s Big Tech companies are “virtual”, meaning they don’t have their own manufacturing facilities. They commission TSMC and other so-called foundations to manufacture the chips they design. Peter Fintl, a chip market analyst and consultant at Capgemini, recently told German business daily Handelsblatt that TSMC has “gained a significant regulatory position” in the global market.
The semiconductor industry as a whole was greatly impressed by Pelosi’s visit to Taiwan. Global shortages caused by the COVID-19 pandemic have delayed the production of cars, TVs, computers, as well as helping global inflation. A major dispute between China and Taiwan, where the US is likely to take sides, could cause further disruption.
During the meeting between Liu and Pelosi, the two sides discussed the Chips and Science Act recently passed in the United States which aims to restore the semiconductor supply chain. The new law includes a $52 billion package to support chipmaking in the United States, and TSMC will likely benefit from the program as a result of the $12 billion chip factory it plans to build in Arizona.