Taiwan’s status critical to chip production

Taiwan’s status critical to chip production
Photo by Louis Reed on Unsplash.com.

Will Claney, Tech TalkCONTRA COSTA COUNTY, CA (August 22, 2022) — There is much in the news recently about China trying to reunify the island nation of Taiwan.

This is nothing new to either nation, with China claiming the island as their own and Taiwan nationals claiming they are a free and separate country.

However, this conflict may affect the manufacturing process here in the USA. Asia is the primary source for computer components and chips, and the best chips come from Taiwan – not China.

In fact, Taiwan produces such great quality that the rest of the world is envious. Chips from the Taiwan Semiconductor Manufacturing Co. (TSMC) are in such demand that companies will wait on TSMC to build and ship needed components.

If China decides to invade Taiwan, all chip manufacturing will shut down until the Chinese are able to get enough workers to restart the plant. As a computer builder, we seek out the best of the best for our computers. If there is an attempt to take control of the island, we are likely to be in big trouble and so are you.

Production slowdown

TSMC chair Mark Liu told CNN that the company’s advanced chip factory would become inoperable if China invaded Taiwan, according to an interview aired July 31. TSMC has more than 50% share of the global market for contract chip-making, according to Bain & Co. This means half of the production of chips worldwide would slow. It could take China months to restart chip production, according to Bing. (Note: Contract chip-making means they make the chips that companies like Intel and AMD design.)

As you may know, auto manufacturers are already suffering from a severe chip shortage. Cars and trucks sit idle waiting for their chip components.

The computer business is fully dependent on Asian chip shipments and, in particular, chips from Taiwan. Even a small interruption, such as the supply chain issues that we have already seen, will affect the computer business because nearly everything in a computer is a chip. Companies like Apple, HP and Dell are impacted.

To protect yourself and your business, replace your aging computer systems now. If you are interested in upgrading your existing computer, do it now.

If you are waiting for the United States to catch up with their new chip companies, that is years away from production. More than $10 billion of investment is needed just to start replacing what Taiwan produces.

Email questions or comments to willclaney@gmail.com.

Will Claney
Will Claney
 | Website

William Claney is an independent tech writer and former owner of Computers USA in the Clayton Station. Email questions or comments to willclaney@gmail.com.