Taipei is attempting to safeguard its technological know-how against Beijing.
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| China-Taiwan geopolitical crisis and semiconductor shortage |
Chinese forays into the East China Sea and the skies above Taiwan are common, but they are becoming more frequent as Beijing seeks to establish itself as the only legitimate government on the self-governing island. In reaction to the arrival of a bipartisan delegation of members of the United States Congress to Taiwan on April 15, China conducted military drills near the island in the morning of April 15. Frigates, bombers, and fighter aircraft belonging to the Chinese military have been sent to the East China Sea and the region around Taiwan. The incursions of six Chinese military planes into the Taiwanese air identification defense region, on the other hand, were not in short supply. According to the Minister of Defense, Chiu Kuo-cheng, four J-16s and two J-11s were seen flying over the island in a demonstration of military might and might not.
As has been customary in recent years, the visit of the group headed by Bob Menendez, the chairman of the Senate Foreign Relations Committee, was also not previously disclosed. It is not well received in Beijing when the figure of the Republican senator, who is well-known for his pro-Taiwanese beliefs, appears. Menendez, along with Republican Marco Rubio, has co-sponsored legislation to rename the Taipei de facto embassy in Washington to the 'Taiwan Representative Office,' which would be a more appropriate name for the facility.
Its presence on the island disturbs the Chinese government, which saw the delegation's visit as an effort to reinforce the United States' closeness to the authorities in Taipei. In reality, Beijing is keeping a careful eye on Washington's attitude, which, despite the fact that it has never recognized Taiwan's national sovereignty, has frequently maintained its "rock solid" commitment to protecting the island's sovereignty.
Taiwan's role in the microchip industry
The bipartisan delegation from the United States met with President Tsai Ing-wen in the morning, and Senator Menendez reaffirmed that Taiwan, as a technological center, is an essential "nation" for global security in their face-to-face meeting. The choice to refer to Taiwan as a "country" does not sit well with Beijing, which opposes any reference to the island as an independent state. In truth, China considers the island to be one of its provinces, not a separate nation.
The senator from the United States, on the other hand, emphasized the technical significance of Taiwan, which is one of the world's top chip producers. Since its founding, Taipei has seen its technical supremacy as a strategic advantage, not just economically but also politically, relying on innovation as a means of maintaining its independence. The Taiwanese semiconductor industry, which has seen tremendous growth in recent years, is, nevertheless, challenged by the objectives of Beijing.
Taiwan is attempting to safeguard its technological know-how against Chinese competition. Prime Minister Su Tseng-chang of Taiwan recently emphasized the danger posed by the "red supply chain" (a reference to the colors of the Chinese Communist Party), calling for joint action by the Ministry of Justice and the Taiwanese Parliament to expedite the approval of an amendment to a draft law against economic espionage, which was first proposed in February. Those who promote the dissemination of essential national technology to "foreign hostile forces" may face a sentence of up to 12 years in jail and penalties ranging from 5,200 to 520,525 US dollars under the new legal framework. And the reference to China is made, despite the fact that it is not printed in black and white.
The Taiwanese Semiconductor Task Force - which is under the jurisdiction of a Ministry of Justice office that is tasked with combating illegal expert recruitment - has recently launched an investigation into 100 Chinese companies that have been accused of hiring Taiwanese engineers in order to obtain relevant information. Integrated circuit designers are among the most highly sought-after occupations, with salaries up to three times more than those provided to Taiwanese workers and in foreign currencies to boot. In contrast, although the national legislation to preserve the semiconductor industry does not restrict Chinese businesses from employing Taiwanese engineers, it does limit Chinese investment in some critical parts of the manufacturing chain, including in the design of semiconductors themselves.
The growth of the leading company
Taiwan Semiconductor Manufacturing Business (Tsmc), the industry's top company, continues to gather encouraging data, demonstrating the increasing demand for semiconductors throughout the world. According to preliminary data, the Taiwanese industry generated a net profit of 7 billion US dollars in the first quarter of 2022, an increase of 45.1 percent year on year and an increase of 22 percent over the same period in 2017.
The expansion of the industry, on the other hand, may be slowed as a result of the geopolitical tensions that exist between Taiwan and China. A probable escalation between Beijing and Taipei, in the prolongation of the Russian war in Ukraine, threatens undermining the already fragile circumstances of the global chain of microchips, with apparent effects in the automotive, technical and ecological sectors.