EU seeks to strengthen Taiwan’s ‘silicon shield’ as military tensions with China threaten chip supply
- European Parliament overwhelmingly passes resolution calling for a supply-chain agreement with Taiwan, weeks after China formed a ‘virtual blockade’ of the island
- Taiwan dominates the global market for critical semiconductors, and businesses within the European Union depend heavily on the island’s advanced computer chips
European lawmakers are calling for a strategy to protect their supply chains with Taiwan – the world’s biggest producer of critically important semiconductors, and a potential military flashpoint.
The European Parliament passed a resolution 424-14 on Thursday, asking that its executive arm, the European Commission, “swiftly start working on a resilient supply-chain agreement with Taiwan”, according to parliament’s official website.
The resolution says such an agreement should address “respective vulnerabilities in a mutually beneficial manner” while also “preserving Taiwan’s security by strengthening its ‘silicon shield’”.
The lawmakers who help chart a path for the 27-nation, 448-million-population European Union pointed in their resolution to mainland China’s military pressure on Taiwan since August, including a “virtual blockade” of the island, and they noted that Taiwan “dominates” the world’s semiconductor manufacturing market.
“They want to secure their demand for chips, because I don’t think EU manufacturing can otherwise survive without them,” said Chen Yi-fan, an assistant professor of diplomacy and international relations at Tamkang University in Taiwan.
In Europe, Airbus and electric vehicle developers such as Fiat, Peugeot and Volkswagen need a steady supply of chips to make their core products. Europe lacks an indigenous chip-making industry on the scale of Taiwan or South Korea.
Beijing sees the self-ruled island as part of China and has never ruled out the use of force to take control of it. Most countries, including the US, do not recognise Taiwan as an independent state. Washington, however, opposes any attempt to take the island by force.
“If the chip supply from Taiwan or elsewhere is disrupted by conflict, global chip prices will inevitably soar and harm the European economy that depends so heavily on them,” said Neil Mawston, executive director with the market research firm Strategy Analytics in Britain.
Chen said European Union leaders will probably keep a distance, politically, from Taiwan, as much of Western Europe values its ties with mainland China. But he said EU members Lithuania and the Czech Republic, which have fostered strong informal relations with Taiwan over the past three years, may forge ahead.
Taiwan’s Export-Import Bank reached an agreement this month with a Lithuanian counterpart to facilitate trade by funding small to mid-sized importers, and Lithuania plans to open a trade representative office in Taipei by year’s end.
And in July, the Czech Republic hosted a Taiwanese parliamentary delegation, irking mainland China.
The resolution approved this week also called for a bilateral investment agreement with Taiwan to help protect the interests of the EU, and it suggested that member states without Taiwan trade offices set them up.
An investment agreement could lead to talks that eventually “deepen bilateral economic ties”, the resolution says.
The resolution is non-binding, and the commission may decide to follow it or ignore it, a commission spokesman said on Friday.