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Nancy Pelosi speaking at the United States Department of Labor. Wikipedia

Microchip wars heating up over Taiwan

A reporter from the Taiwanese state media TVBS reported that, according to her sources, speaker of the United States House of Representatives Nancy Pelosi will be arriving in Taipei on August 2. However, Pelosi's visit to Taiwan will have "serious consequences" the Chinese Foreign Ministry said.

Published: August 1, 2022, 11:49 am

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    Speaker Pelosi may arrive in Taiwan to meet with the island’s chief of staff the day after, the China Times reported, citing sources. According to the publication, the Taiwanese Foreign Ministry has not yet confirmed these plans. The UN rates Taiwan as a province of China. In 1979, the United States also switched recognition from Taipei to Beijing.

    For this reason, China has insisted that Pelosi approach Beijing for an official visit.

    This war of words that may soon escalate, goes back almost ten years and is rooted in a race for global supremacy in microchip production: Taiwan is a key country in this regard.

    Because Taiwan controls most of the world’s chip manufacturing capacity, US Commerce Secretary Gina Raimondo warned in July that the US would go into a “deep and immediate recession” if it lost access to the island nation’s chips.

    “If you allow yourself to think about a scenario where the United States no longer had access to the chips currently being made in Taiwan, it’s a scary scenario,” Raimondo told CNBC. “It’s a deep and immediate recession. It’s an inability to protect ourselves by making military equipment.”

    But US diplomacy has nevertheless been less than efficient in dealing with this critical issue: In 2013, when former US President Barack Obama received Chinese President Xi Jinping in California, it was perceived as an affront in China. For a nation like China, of course, a reception in Washington would have been more appropriate.

    Putin-Xi Pact

    At the Winter Olympics in Sochi in 2014, according to informed circles, the Chinese, still angry after the Obama snub, made a pact with Russian leader Vladimir Putin. Even if the date of a pact between the two countries is disputed, the existence of a deal remains undisputed.

    The content of the rumored pact is that China and Russia would go on the offensive together if attacked. China would defend Taiwan, an island strategically occupied by the United States. After the US defeat in Afghanistan and Vladimir Zelensky’s demand that nuclear weapons be delivered to his country, the two allied powers Russia and China saw the writing on the wall.

    The situation around Taiwan is currently coming to a head and China has been moving its troops there. Especially after Democratic leader Nancy Pelosi announced a visit to Taiwan in order to tie the country even more closely to the United States. This signaled to China that action had to be taken. Moscow has already confirmed its support for Beijing.

    Losing chip supremacy

    The Taiwan Semiconductor Manufacturing Company (TSMC) is the third most important semiconductor manufacturer in the world. The company has even taken the lead in order-to-order manufacturing – the US and its largest chip manufacturer, Intel, are among the largest customers. These are crucial for both US technology and Chinese production in the struggle for economic growth. Losing access to chips, means no longer being able to assert oneself technologically.

    This is particularly important for the US and the West since they do not have the same access as China and Russia to raw materials. If the United States loses access to Taiwanese computer chips, the West will lose its supremacy which it can only maintain because of its technological lead.

    Even if new factories expand US chip manufacturing capacity, research firm TrendForce pointed out that they would not make a dent in Taiwan’s industry dominance in the short term.

    Meanwhile Russian-made Su-30MK2 fighters, which are in service with the aviation brigade of the Eastern Fleet of the PLA Navy (operational zone – Taiwan and the Taiwan Strait) performed night flights during exercises of the People’s Liberation Army of China with US Navy aircraft carrier USS Ronald Reagan (CVN-76) approaching the waters east of Taiwan.

    The Pentagon has begun deploying additional forces to Taiwan, including a nuclear-powered aircraft carrier and refueling aircraft, Nikkei Asia confirmed.

    EU stands with US

    “In the event of a Chinese military invasion of Taiwan, we have made it very clear that the EU, together with the US and its allies, will take similar or even greater measures than we have now taken against the Russian Federation,” said Jorge Toledo, new EU ambassador to China.

    In China, the Global Times reported that the plane carrying US House Speaker Nancy Pelosi could still take the “risk” by attempting to land at a Taiwan airport under the pretense of an emergency such as a technical problem or “refueling”.

    In this regard, “Chinese military patrols, radars, as well as forces participating in the exercises should be on high alert in the coming days”.

    The publication noted that “if Pelosi’s plane does have problems during her flight near China, then the People’s Liberation Army of China will provide protection and allow her to land at the airport in Sansha, Hainan Province in the South China Sea or in other air harbors in mainland China that can provide professional service and assistance as long as the speaker’s plane stays away from Chinese Taiwan.”

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