Global computer chip shortage concerns grow as pressure from China on Taiwan increases

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Taiwan has the world’s biggest semiconductor industry, with one single company — Taiwan Semiconductor Manufacturing Company — producing 53 per cent of the world’s chips.
Global computer chip shortage concerns grow as pressure from China on Taiwan increases

As pressure from China on Taiwan increases amid a shortage of semiconductor chips, business groups are increasingly worried that another conflict similar to the ongoing war in Ukraine could have global consequences.

China renewed its threat to attack Taiwan on Thursday after almost a week of intensified military intimidation prompted by a visit to Taipei last week by U.S. House Speaker Nancy Pelosi.

Taiwan is a self-governing democracy, but China’s claims to the state have only grown more aggressive in recent months, firing missiles into the Taiwan Strait this week and broaching a long-held buffer zone with planes and ships.

China has made clear its plans to annex Taiwan, which split with the mainland in 1949, and Taiwan is concerned China wants to spread its dominance further in the western Pacific, which could prevent Taiwan’s allies from helping in the event of an attack from China.

China cut off some Taiwanese food imports and ended dialogue with the United States on a number of issues in retaliation for Pelosi’s visit.

An attack on Taiwan could have an outsized impact on global supply of semiconductor chips, which are used in everything from computers to cars. Taiwan is a global leader in the supply of these chips, and its economy is export-oriented. In 2020, Canada imported more than $5 billion in products from Taiwan, and earlier in 2022, Canada sought deeper trade links with Taiwan as part of its Indo-Pacific trade strategy.

“Strengthening bilateral trade investment relations between Taiwan and Canada (is) very critical to Taiwan,” said Jin-Ling Chen, director general of the Taipei Economic and Cultural Office in Toronto.

Margaret McCuaig-Johnston, senior fellow at the Institute for Science, Society and Policy at University of Ottawa, said the increasing pressure on Taiwan stems from the country’s evolving relationship with the United States.