Direct Sanction on Taiwan’s Microchip Industry Doesn’t Make Sense, Experts Say

AA / Ankara

At a time of escalating tensions between China and Taiwan over a visit to the island by a top US politician, experts said sanctions should not directly include the microchip industry, which is a vital component of most industrial products.

China suspended the import of certain fruits and fish from Taiwan, starting Wednesday, and also banned the export of natural sand to the island, following a visit to Taiwan by the Speaker of the United States House of Representatives, Nancy Pelosi, which is the first high-level visit by an American politician to the island in 25 years.

In a press conference during his visit, Pelosi said that “strength, goodwill and again, the demonstration of a democracy that has evolved into a stronger place today and provides a very strong contrast to what is happening in mainland China… no evidence is needed given what happened in Hong Kong,” referring to the semi-autonomous region which has undergone drastic changes, since pro- -democratic meetings were held there in 2019.

China opposed the visit and condemned it, comparing it to “playing with fire, and extremely dangerous”, as it considers Taiwan a “separatist province” and has pledged to reunite it with the mainland, by force if the need arises.

Speaking to Anadolu Agency, Sant Manukyan, Head of International Investment Markets Department at Türkiye’s largest private credit company, Is Bank, said: “The decisions [de ban] are not new. In fact, China has previously imposed restrictions in these areas citing their environmental impacts or illegitimacy.”

China may expand sanctions against Taiwan, according to Manukyan.

Taiwan is of great importance to the global economy as a major computer chip maker, Manukyan said, “It doesn’t make much sense for China to take direct action. [sanction] against fleas, because it will create a global problem, prompting reactions from all over the planet. But of course, this is one of the problematic points.

Recalling the decision of the United States to introduce a law for the investment of billions of dollars in domestic semiconductor manufacturing and scientific research, Manukyan said that investments in semiconductors in the United States will bear their fruits in 3 to 5 years. Therefore, the flea problem should get worse.

“Taking into account the importance of chips to the global economy, the United States cannot allow the unification of Taiwan with China, and China will not want to lose control of the island. I plan a lawsuit of this conflict between the two parties,” Manukyan said.

Bozkurt Aran, who heads the Center for Business Studies at the Turkish Economic Policy Research Institute (TEPAV), said recent developments will mainly have political, rather than economic consequences.

According to Aran, “China also manufactures semiconductors, not for specific purposes, but for general use, such as automotive components. But the chips made in Taiwan are more sophisticated. So China will only disrupt the market. island by conducting large-scale live-fire exercises, and keeping the island under control”.

Taiwan generates 70% of its total revenue from exports, of which 38.5% comes from electronic components, 34.8% from microchips and 13% from communication devices.

The Taiwan Semiconductor Manufacturing Company (TSMC) accounts for more than half of the world’s electronic chip market.

*Translated from English by Mounir Bennour

Only part of the dispatches, which Anadolu Agency broadcasts to its subscribers via the Internal Broadcasting System (HAS), is broadcast on the AA website, in a summarized manner. Please contact us to subscribe.

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