(Bloomberg) -- One of Nancy Pelosi’s key meetings on her whirlwind tour of Taiwan reportedly is TSMC, the island’s most valuable company and world’s biggest contract chipmaker.
The US House Speaker is meeting Taiwan Semiconductor Manufacturing Co. Chairman Mark Liu on Wednesday to discuss Congress’ recently passed Chips and Science Act and its $52 billion in subsidies for new chip manufacturing plants on American soil, according to a Washington Post report. It’s a notable stop in an itinerary otherwise packed with government agencies and symbolic photo ops and underscores not just the strategic importance of the island, but its outsized technological weight in the global economy.
Taiwan is home to industry-leading chip factories as well as an industrial base that supplies key components for electronics, medical equipment and sensitive nuclear power and military use. US officials have said that Beijing gaining access to the technology and expertise housed in Taiwan constitutes a security risk. China, which considers Taiwan a region under its jurisdiction, has called the Speaker’s visit to the island “provocative.”
A TSMC spokesperson declined to comment on Pelosi’s trip to the island. The Hsinchu-based chipmaker is the exclusive supplier of Apple Inc.’s Silicon processors for iPhones and Mac PCs as well as the manufacturing partner of other US companies like Advanced Micro Devices Inc., Broadcom Inc. and Qualcomm Inc. TSMC is now building a $12 billion fab in Arizona to help boost chip production on US soil, but it still makes the majority of its chips and all of its cutting-edge semiconductors at home.
This Is How China Could Hit Back Over Pelosi’s Taiwan Visit
In response to Pelosi’s visit, Beijing announced four days of live-fire military drills in the waters surrounding Taiwan. The announcement included six exclusion zones encircling Taiwan, blocking ships and aircraft from passing through large swaths of water and airspace and triggering concern that the drills will hamper shipments and exacerbate supply chain issues.
The Taiwan Strait is one of the world’s busiest shipping routes and is the primary path for ships passing from China, Japan, South Korea and Taiwan to westward destinations. Even a minor disruption can mean critical delays for businesses, hospitals and utilities. Asia-based companies like Sony Group Corp. have battled logistics snarls since the start of the pandemic and any further disruption is liable to impact global distribution of key products.
TSMC and peers like Samsung Electronics Co. have had to strike a balance between the US and China, as Washington’s attempts to thwart Beijing’s technological ambitions escalate. Part of the Chips and Science Act passed this week said that companies receiving funding must promise not to boost production of advanced chips in China.
Following Pelosi’s arrival, China halted natural sand exports -- used to make glass and concrete -- to Taiwan, along with imports of some fish and fruit. Chinese electric-vehicle battery maker Contemporary Amperex Technology Co. has also decided to push back its announcement of a North American factory to supply Tesla Inc. and Ford Motor Co., Bloomberg News reported.
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Author: Debby Wu