Back in February, as the world was beating a path to Taiwan\u2019s door for help to tackle a shortage of semiconductors, the health minister got into a scrap with China over Covid-19 vaccines.<\/p>\n
Beijing, he suggested, had used political pressure to derail Taiwan\u2019s plan to purchase five million doses directly from Germany\u2019s BioNTech SE, rather than via a Chinese company which held the rights to develop and market the BioNTech-Pfizer Inc. vaccine across China, Hong Kong, Macau and Taiwan. Foreign Ministry spokeswoman Hua Chunying retorted that Taipei \u201cshould stop hyping up political issues under the pretext of vaccine issues.\u201d<\/p>\n
Three months later, Taiwan is paying the price for a lack of vaccines, with a surge in virus cases that threatens to trigger a lockdown. Having successfully sidestepped the first Covid wave, the government now faces a health emergency \u2014 only about 1% of its population is vaccinated so far \u2014 with the potential to disrupt the chip industry that dominates the local economy, and which is critical to an already-squeezed global supply.<\/p>\n
That\u2019s a link made by the head of Taiwan\u2019s office in New York, who warned of \u201clogistical problems\u201d without access to more shots. Yet by shunning vaccines from China and warning of more chip shortages if it can\u2019t source enough doses elsewhere, the government is giving even greater incentive to the world\u2019s biggest economies to make investments that may erode Taiwan\u2019s competitive edge in semiconductors over the long term.<\/p>\n
Taiwan\u2019s predicament illustrates its strategic yet vulnerable position at the confluence of U.S.-China tensions. Separated by a 110 mile (177 kilometer)-wide strait, Taiwan is regarded as a province by Beijing and its conquest is President Xi Jinping\u2019s key goal for historical and ideological reasons. The U.S. is an ally of Taipei\u2019s democratic government and a big buyer of its exports, dominated by chips produced by Taiwan Semiconductor Manufacturing Co.<\/p>\n
The onset late last year of chip shortages that have hobbled industries from autos to computer gaming had looked to give Taipei global leverage. TSMC is the world\u2019s leading provider of cutting-edge semiconductors and holds 56% of the so-called foundry business of manufacturing chips designed by customers including Apple Inc. and Qualcomm Inc. <\/p>\n
But Taiwan has suffered a sudden reversal of fortunes. The pandemic comes just as a drought triggers power outages, stoking economic uncertainty and a slump in what was the world\u2019s best performing stock index in the four years to January.<\/p>\n
What\u2019s more, the very source of Taiwan\u2019s recent geopolitical clout \u2014 its dominance of the market for cutting-edge chips \u2014 is under attack as governments from the U.S. to Europe and Japan, alerted to the strategic nature of the semiconductor supply chain, seek to spur production at home. China is pumping billions into catching up after Washington imposed export controls on U.S. chip technology. <\/p>\n
\u201cI think we\u2019ve become too dependent on Taiwan and Korea, that\u2019s the point, we need a more balanced global supply chain,\u201d Pat Gelsinger, chief executive officer of Silicon Valley\u2019s Intel Corp., the world\u2019s biggest chipmaker, said in an interview. The U.S. and Europe should act \u201cmore aggressively\u201d to counter the \u201cimbalance\u201d of Asia\u2019s lead in manufacturing semiconductors that are mostly consumed in the west, he said.<\/p>\n
Intel is a rival and plans to challenge TSMC at the cutting edge, but Gelsinger isn\u2019t the only voice making for uncomfortable listening in Taiwan. Commerce Secretary Gina Raimondo said this month that while the Biden administration is working with Taipei and TSMC to address the chip shortage, it\u2019s also looking to reduce U.S. dependence on Taiwan. TSMC is in the process of building a new fabrication facility in the U.S. <\/p>\n
Some in Washington have suggested that Taiwan is a backdoor to China by enabling tech transfers. Republicans Michael McCaul and Tom Cotton have called on the administration to engage with Taipei to do more to \u201cmitigate the risk of Taiwanese companies providing services and technologies to entities of concern,\u201d a reference to Chinese state-backed companies with links to the military. <\/p>\n
With the prospect of some $50 billion in government funding to build out chip making in the U.S. and the promise of still more in Europe and South Korea, there are signs that Taiwan is starting to feel the heat. <\/p>\n
The government is working to draft a new export control list targeting technologies with military use, to tighten curbs on exports to China and raise the penalty for violations, according to a person familiar with the issue who asked not to be named discussing policy deliberations.<\/p>\n
That\u2019s after Alchip Technologies Ltd\u2019s stock took a beating in April when the Washington Post reported that it supplied chips to Phytium, a People\u2019s Liberation Army-affiliated entity. Alchip said it has always been in compliance with government regulations and that Phytium projects were on hold.<\/p>\n
Taipei has become more alert to the possibility of Chinese companies ramping up efforts to recruit Taiwanese engineers. Last month the Cabinet met to discuss how to prevent the outflow of local talent, with the Ministry of Labor instructing local job-search websites to remove ads recruiting Taiwanese citizens to work for China, particularly in the semiconductor industry.<\/p>\n
Companies and headhunters can be fined as much as NT$500,000 ($17,900) for advertising such jobs and NT$5 million for facilitating local engineers\u2019 employment with Chinese companies on the mainland, ministry official Huang Chiao-ting said. Job search site 1111 said it has removed close to 3,000 job listings. Investigators have visited the local offices of four Chinese companies, including Bitmain Technologies Ltd, within the last two months to look into allegations they recruited engineers illegally.<\/p>\n
\u201cBy more aggressively investigating Chinese companies\u2019 efforts to poach Taiwanese engineers, we hope we can help prevent potential trade secrets leaking to China should local talent get hired away,\u201d said Judy Chen, a spokeswoman for the Hsinchu District Prosecutors Office. She declined to name the other companies probed.<\/p>\n
Members of the ruling Democratic Progressive Party are considering amending the law to boost penalties for intellectual property theft. Lawmaker Chao Tien-lin is proposing life sentences for those found guilty of economic espionage, a crime not currently on the statute books in Taiwan.<\/p>\n
\u201cTaiwan needs to win trust from its partners and help prevent China from building a supply chain from stolen technology,\u201d Chao said in comments provided by his assistant.<\/p>\n
Whether it\u2019s enough to allay concerns in Washington may become clearer with the publication of President Joe Biden\u2019s review of the semiconductor supply chain. The 100 day review is due to conclude on June 4. What\u2019s already known is that there is bipartisan support to build U.S. chip making, and Taiwan is in the cross hairs.<\/p>\n
\u201cTaiwan dominates semiconductor manufacturing, and one company, Taiwan Semiconductor Manufacturing Company, virtually controls the market,\u201d Senator John Cornyn, a Texas Republican who introduced the CHIPS for America Act to boost U.S. production, said on the Senate floor this month.<\/p>\n
The sustainability of Taiwan\u2019s industry has also come into question after it suffered power outages this month, focusing attention on environmental factors including water shortages and uncertainty over future electricity supply for power-hungry chip plants.<\/p>\n
Taiwan can potentially overcome the virus outbreak as well as the power and water shortages, showing its companies \u201ccan still satisfy global demand by manufacturing mostly in Taiwan without any issue,\u201d said Arisa Liu, a researcher at the Taiwan Institute of Economic Research.<\/p>\n
In the short term that will require vaccines. On Saturday, the chairman of Shanghai Fosun Pharmaceutical (Group) Co. Ltd., the Greater China distributor of the BioNTech-Pfizer vaccine, told China\u2019s state-run Xinhua News Agency that the company was willing \u201cto use the vaccine to serve Taiwan compatriots.\u201d<\/p>\n
But it\u2019s unclear if Taiwan would now accept a vaccine deal that goes through Fosun, making it more likely any shots will come from Europe or the U.S. According to Chunhuei Chi, a former health-policy adviser in Taiwan who is now director of the Center for Global Health at Oregon State University, \u201cmany politicians in Taiwan urged the Taiwanese government to use microchips as leverage\u201d for vaccines. <\/p>\n
While the government is reluctant to use that leverage explicitly, he said, \u201cif the U.S. is concerned about the supply of chips from TSMC, the U.S. would have incentives to provide Taiwan with vaccines to make sure production will not be disrupted by this outbreak.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Back in February, as the world was beating a path to Taiwan\u2019s door for help to tackle a shortage of semiconductors, the health minister got into a scrap with China over Covid-19 vaccines. Beijing, he suggested, had used political pressure to derail Taiwan\u2019s plan to purchase five million doses directly from Germany\u2019s BioNTech SE, rather than via a Chinese company which held the rights to develop and market the BioNTech-Pfizer Inc. vaccine across China, Hong Kong, Macau and Taiwan. Foreign Ministry spokeswoman Hua Chunying retorted that Taipei \u201cshould stop hyping up political issues under the pretext of vaccine issues.\u201d Three […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-798496","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/798496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=798496"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/798496\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=798496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=798496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=798496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}