Commentary: Taiwan dominates the world’s computer chip supply – no wonder the US is worried


NOTTINGHAM, England :: One aspect of Nancy Pelosi’s trip to Taiwan that has been largely overlooked is her meeting with Mark Lui, president of Taiwan Semiconductor Manufacturing Corporation (TSMC).

Pelosi’s journey coincided with US efforts to convince TSMC – the world’s largest chip maker, on which the US relies heavily – to establish a manufacturing base in the US and stop making advanced chips for Chinese companies.

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US support for Taiwan has historically been based on Washington’s opposition to Communist rule in Beijing and Taiwan’s opposition to China’s inclusion. But in recent years, Taiwan’s autonomy has become a vital geopolitical interest for the US due to the island’s dominance in the semiconductor manufacturing market.

Semiconductors – also called computer chips or simply chips – are an integral part of all network devices embedded in our lives. They also have advanced military applications.

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Transformational, super-fast 5G internet has emerged, enabling a world of connected devices of every kind (the Internet of Things) and a new generation of networking weapons. With this in mind, US officials during the Trump administration began to realize that US semiconductor design companies, such as Intel, relied heavily on Asia-based supply chains to manufacture their products.

In particular, Taiwan’s position in the world of semiconductor manufacturing is somewhat similar to Saudi Arabia’s standing in OPEC. TSMC has a 53 percent market share of the global foundry market (factories contracted to make chips designed in other countries). Other Taiwan-based manufacturers claim an additional 10 percent of the market.

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