China invasion of Taiwan would cause major blow to high-tech supply chain, warns boss of semiconductors firm
If China invaded Taiwan there would be major impacts across the global high-tech supply chain “in weeks”, according to the chief executive of one of the most important companies involved in making vital semiconductor chips.
Speaking exclusively to Sky News, Doris Hsu, CEO of Taiwan-based GlobalWafers, also said customers have “a lot of concerns” about China’s intentions in Taiwan and it’s one of the reasons the firm had opted to locate its new plant in Texas.
Increased tension across the Taiwan Strait has led to concerns that companies will look to protect themselves by withdrawing from the self-governing island that China sees as its own and direct longer-term investments elsewhere.
Taiwan is a vital global player in technological development and manufacturing, particularly semiconductors.
Semiconductors are the vital microchips described as the “brain” in modern electronics; they power everything from planes and appliances to cars and smartphones.
Taiwan manufactures around 90% of the world’s most advanced semiconductors and around 50% of the broader market, much of them made by global leader TSMC.
Any disruption to this would be catastrophic to global supply chains.
GlobalWafers manufactures silicon wafers, one of the crucial parts in semiconductors. It is the world’s third-largest supplier of this component and one of TSMC’s most important suppliers.
Doris Hsu says ‘risk management’ is one of the reasons the new factory was built in Texas
“Some of our customers do have quite a lot of concern about the overall security in Taiwan,” says Ms Hsu. “They want us to be more diversified.”
“In 20 years we have never been asked so frequently as we have recently, so many customers saying ‘Hey Doris, what if anything goes wrong? What’s your contingency plan?'”
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How could a China-Taiwan war hurt the economy?
Speaking about the company’s new $5bn (£4bn) chip plant in Texas, she said one of the reasons for the decision was “contingency or risk management”.
While GlobalWafers is already a very globalised company, with 18 operations across nine countries, the threat of future instability is having an impact on decision making.
“I have been in this industry for over 20 years,” she says.
“In last 20 years, I have had to care more about the business, economic issues, the engineering stuff. What about IP [intellectual property]? What about your leadership or technology? But now I have to think about global political-related issues!”
‘Attack would affect $2trn of trade’
Semiconductors are just one of the areas where Taiwan punches hugely above its weight. Despite its small size, it is the world’s 16th-largest trading economy.
Research organisation the Rhodium Group has estimated that any form of attack or blockade to Taiwan would impact $2trn of economic activity, before taking into account any sanctions or secondary impacts.
GlobalWafers makes silicon wafers, a vital part in semiconductors
There have been concerns that some firms, burnt perhaps by experiences in Russia, would look to move some operations away from the island.
Brompton Bikes, the British bicycle manufacturer, is just one firm that has indicated it will do this.
But experts say there is no mass exodus, more a gentle drip of long-term investment decisions going elsewhere.
“Most companies are not thinking actually about pulling out or relocation – but expansion,” explains Kirsty Tzun-Tzu Hsu, director of the Taiwan ASEAN Studies Center at Chung-Hua Institution of Economic Research.
“They are expanding their supply or supply chain from Taiwan to other countries or other regions, so that they may have someplace to back up if Taiwan cannot produce as quickly or as according to the expected timeframe.”
China is one of many nations also reliant on Taiwan’s high-tech sector and this has been cited by some experts as a reason an invasion may not happen.
This is the highest stakes diplomacy via social media.
The American president just posted on his Truth Social platform: “We know exactly where the so-called ‘Supreme Leader’ is hiding.
“He is an easy target, but is safe there – We are not going to take him out (kill!), at least not for now. But we don’t want missiles shot at civilians, or American soldiers.
“Our patience is wearing thin. Thank you for your attention to this matter!”
Israel-Iran live: Trump says US knows where Iran’s supreme leader is ‘hiding’
It was followed minutes later by “UNCONDITIONAL SURRENDER!”
In real-time, we are witnessing Donald Trump’s extreme version of maximum pressure diplomacy.
He’d probably call it the ‘art of the deal’, but bunker busters are the tool, and it comes with such huge consequences, intended and unintended, known and unknown.
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The bunker buster bomb which could destroy Iran’s nuclear ambitions
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Nuclear sites targeted in Iran
There is intentional ambiguity in the president’s messaging. His assumption is that he can apply his ‘art of the deal’ strategy to a deeply ideological geopolitical challenge.
It’s all playing out publicly. Overnight, the New York Times, via two of its best-sourced reporters, had been told that Mr Trump is weighing whether to use B-2 aircraft to drop bunker-busting bombs on Iran’s underground nuclear facilities.
Meanwhile, Axios was reporting that a meeting is possible between Trump’s envoy Steve Witkoff and Iran’s foreign minister Abbas Araghchi.
The reporting came just as Mr Trump warned “everyone in Tehran to evacuate”. The nuclear sites being threatened with bunker busters are not in Tehran, but Trump’s words are designed to stoke tension, to confuse and to apply intense pressure.
His actions are too. He left the G7 in Canada early and asked his teams to gather in the White House Situation Room.
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Trump: ‘I want an end, not a ceasefire’
This is a game of smoke, mirrors, brinkmanship and – maybe – bluff. In Tehran, what’s left of the leadership is watching and reading closely as they consider what’s next.
Maybe the Supreme Leader and his regime’s days are numbered. Things remain very unpredictable.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
From history, though, regime change, even when it comes with a plan – and there is certainly not one here, spells civil war and from that comes a refugee crisis.
These are truly tense and chaotic times.
World
Ukraine war: 14 killed as Russian missile and drone attacks strike Kyiv – including American citizen
Russian missile and drone attacks have killed 14 people in Kyiv overnight, according to Ukrainian officials.
A 62-year-old US citizen who suffered shrapnel wounds is among the dead.
At least 99 others were wounded in strikes that hollowed out a residential building and destroyed dozens of apartments.
Pic: AP
Emergency workers were at the scene to rescue people from under the rubble.
Images show a firefighter was among those hurt, with injured residents evacuated from their homes.
President Volodymyr Zelenskyy described the attack as “one of the most terrifying attacks on Kyiv” – and said Russian forces had fired 440 drones and 32 missiles as civilians slept in their homes.
“[Putin] wants the war to go on,” he said. “It is troubling when the powerful of this world turn a blind eye to it.”
Pic: AP
Ukraine’s interior minister, Ihor Klymenko, said 27 locations across the capital have been hit – including educational institutions and critical infrastructure.
He claimed the attack, in the early hours of Tuesday morning, was one of the largest on the capital since Russia’s full-scale invasion began in February 2022.
Drones swarmed over the city, with an air raid alert remaining in force for seven hours.
One person was killed and 17 others injured as a result of separate Russian drone strikes in the port city of Odesa.
Pic: Reuters
It comes as the G7 summit in Canada continues, which Ukraine’s leader is expected to attend.
Volodymyr Zelenskyy was due to hold talks with Donald Trump – but the president has announced he is unexpectedly returning to Washington because of tensions in the Middle East.
Ukraine’s foreign minister says Moscow’s decision to attack Kyiv during the summit is a signal of disrespect to the US.
Moscow has launched a record number of drones and missiles in recent weeks, and says the attacks are in retaliation for a Ukrainian operation that targeted warplanes in airbases deep within Russian territory.
Kyiv’s mayor Vitali Klitschko says fires broke out in two of the city’s districts as a result of debris from drones shot down by the nation’s air defences.
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Pic: AP
On X, Ukraine’s foreign ministry wrote: “Russia’s campaign of terror against civilians continues. Its war against Ukraine escalates with increased brutality.
“The only way to stop Russia is tighter pressure – through sanctions, more defence support for Ukraine, and limiting Russia’s ability to keep sowing war.”
Olena Lapyshnak, who lived in one of the destroyed buildings, said: “It’s horrible, it’s scary, in one moment there is no life. I can only curse the Russians, that’s all I can say. They shouldn’t exist in this world.”
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