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With the Ukrainian conflict, the eyes of the world are on gas and wheat. However, Russian gas can be replaced by any other gas, be it Norwegian or Qatari natural gas, or even American shale gas. All are replaceable, the problem is logistical, even financial.
The same for wheat, a grain of wheat is the same whether it comes from France or Ukraine. We can also reason by calorie, in this case the food calorie is the same whether it comes from wheat, rice or corn. Once again, the problem remains logistical and financial.
Electronics do not respond to such interchangeability. We will see the different issues on electronic components in the event of a conflict in Taiwan.
Level 0: no problem
For very simple components such as diodes, resistors, but also consumer components such as screens, keyboards or mice. There will be little impact. These components are manufactured worldwide. In addition, they are all easily interchangeable in case of shortage.
Your keyboard can be connected to all computers, as well as your screen.
Level 1: shortage
More advanced components such as computers, motherboards, graphics cards, SSDs and others are mainly manufactured by Taiwanese companies. We can mention Asus, Acer, MSI, Gigabyte or Kingstom. In addition, they also work for American companies such as AMD, Nvidia, HP or Dell.
If there is a conflict, these components will be missing. Fortunately, a Kingstom 1TB hard drive is replaceable with an American-branded Western Digital 1TB hard drive. A Windows computer from Acer is replaceable with a Windows computer from the Chinese brand Lenovo. We can therefore imagine in the long term a recovery in the volume of exports from Taiwan by other brands.
Level 2: review the products
The problem becomes more complex with smaller components like embedded microprocessors. We can cite Taiwanese manufacturers such as MediaTek or TSCM who distribute their own products or manufacture for Apple, NXP or Qualcomm.
For example, if Airbus relies on a MediaTek microprocessor somewhere on the plane. In the event of a production shutdown in Taiwan, Airbus will have to modify its electronic cards and computer programs to migrate to another microprocessor.
In the event of a conflict, a MediaTek product cannot be changed to a Texas Instrument product. We need to review the PCB and the code. Factories around the world will be shut down as thousands of products have to be redesigned to dispense with Taiwanese production.
Level 3: impossibility
Finally, the problem becomes insoluble when a manufacturing technology is only available in Taiwan. This is the case, for example, with 5nm engraving, available only from TSCM in Taiwan. This technology equips the latest Apple M1 processors.
In case of conflict, there will be no competitor offering the same product even by taking over the design.
Apple is aware of its excessive dependence on Taiwan. As such, the iPhone 14 is the first iPhone assembled in India. This is the first step in the company’s strategy to better distribute its Supply Chain. But, since there are still Taiwanese components in the iPhone, Apple will be shut down in the event of a dispute.
Electronics is not a vital resource like the others.
Unlike oil, gas or food calories that can be obtained anywhere on Earth, it relies on Taiwan and its region.
But electronic resources are not so easily interchangeable, the slightest conflict with Taiwan will shut down millions of factories. The countermeasures will only be effective after several months or even years.