Chen Wenling, chief economist of the Chinese Center for International Economic Exchanges, a Beijing think tank, spoke at the end of May about the importance of TSMC for China. According to her, if the United States imposes economic sanctions on China, similar to those currently facing Russia, the country should seize the Taiwan-based chipmaker. The Taiwanese company’s semiconductor supply is vital for Chinese industry.
“recover Taiwan and seize TSMC”
Taiwan represents 61% of the world’s production capacity for semiconductors engraved in 16 nm or less, the most advanced models. China, which considers the island its own, produced only a sixth of the chips used by its own industry in 2021, specifies The Register. This reinforces its desire to own the global industry leader, TSMC. The company is also of interest to the United States, which has financed the construction of a Taiwanese manufacturer’s factory in Phoenix, Arizona. Uncle Sam is not only looking to bring his chip supply chain closer, he also wants to restrict access to China.
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It is in this context of tension between the two powers that the economist Chen Wenling asserts that the United States seeks to isolate China. Even if she calls for an appeasement to avoid a confrontation which would lead to a “disaster for humanity”, she invites China to guard against the weakening of its supply chain. The Middle Empire must prepare its strategy to face the insistence of the United States, which wants to keep the chain for them “.
She explains that if the United States and its allies decide to impose sanctions on China, on a par with those imposed on Russia, the country will have to ” recover Taiwan and seize TSMC, a company that was originally owned by China “.
Sanctions if China takes hostile action
Despite the seriousness of these recommendations, in a context of animosity that persists between China and Taiwan, the economist suggests acting only in direct retaliation for threats against the country’s economic security. She adds that there is no reason to believe in such sanctions from the Americans at this time, unless China launches hostilities against another country. With Russia’s invasion of Ukraine, Westerners are worried that China could do the same with Taiwan.
If China were to take aggressive action against Taiwan, in its pursuit of reunification, the country would likely not be able to get its hands on TSMC. As reminded The Register, the recommended strategy in this case would be that of scorched earth. Taiwan would do well to destroy its semiconductor factories to deprive China of its main source of supply. This decision would work in favor of the United States, which is building more and more chip factories on its soil.