'Business as usual' in Taiwan's Silicon Valley amid China threat

Clusters of unobtrusive buildings greet you when you enter Hsinchu Science Park (HSP), also known as the heart of Taiwan’s Silicon Valley. Outside these modern buildings, there’s little indication that the world’s most important chips are being manufactured inside.

- By Cathy Rose A. Garcia Editor-in-Chief

Taiwan produces around 60% of the semiconductors in the world, and over 90% of the most advanced chips. Most of these advanced semiconductors are manufactured by TSMC (Taiwan Semiconductor Manufacturing Company).

At the TSMC Museum of Innovation here, the company prominently displays the chips it has produced since it was founded in 1987, and how these are used in nearly all aspects of modern life — from home appliances and mobile phones to artificial intelligence (AI) and self-driving vehicles.

TSMC is the world’s largest producer of chips, and a top supplier for Apple and Nvidia. It also accounted for 9% of Taiwan’s gross domestic product (GDP) last year.

This puts TSMC right at the center of the so-called “Silicon Shield.” Experts have long noted that Taiwan’s dominance in semiconductor manufacturing could protect the island from China’s military aggression.

Despite geopolitical tensions, it’s “business as usual” forthe over 600 companies that operate in HSP, officials said.

“(But) if there is a big conflict, if there is a war, that will be absolutely a very big problem for global supply chains,” HSP Bureau Associate Researcher Scott Huang told visiting foreign journalists.

China continues to assert its claim over Taiwan, which Beijing views as a breakaway province. It has threatened to annex the self-ruled island, by force if necessary, endangering ‘Taiwan’s population and threatening the world’s most advanced semiconductor factories.

A possible China attack on TSMC’s facilities in Taiwan would severely affect chip supplies in the world, Mr. Huang said.

“Some scholars estimate that if there is a missile that hits TSMC from China, there will be no chip supplies for advanced manufacturing engineers for at least three years. That means nobody will have a new model of iPhone again for three years until those constructions, manufacturing productions, facilities recover,” Mr. Huang said.