Chip industry grapples with risk of China blockade or attack after Pelosi visit but few options exist
- China’s war games in August following the visit of US House Speaker Nancy Pelosi to Taipei have pushed the industry to rethink its options
- Executives say it will be difficult to replicate the efficiency of Taiwan’s semiconductor industry, given higher costs in countries such as the US
Chinese missiles flying over Taiwan and naval drills in the Strait in August that simulated a blockade by China have jolted the semiconductor industry into contemplating what once seemed a remote possibility: war over the major chip-producing island.
From drafting contingency plans to inquiring about manufacturing capacity outside Taiwan, some companies are now weighing how to respond if China attacks or restricts access to the democratic island, according to 15 semiconductor executives interviewed by Reuters.
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US Vice-President Kamala Harris addresses China threat as she kick-starts her Asia tour
China claims Taiwan as its own territory. Taiwan’s government rejects China’s sovereignty claims.
Chips are crucial for building everything from iPhones and washing machines to cars and fighter jets.
The executives said it would be hard to wean the world off its reliance on Taiwan’s hi-tech chips quickly but geopolitical challenges confronting the industry are increasing.