Apple chipmaker TSMC is one of seven semiconductor companies to announce plans to invest in Japanese operations, ahead of a G7 summit in the country.
One of the key issues to be discussed at the summit is economic resilience and security in the light of growing threats to global trade, which includes fears about the future of Taiwan …
The threat to Taiwan
All Apple processors are made by the Taiwan Semiconductor Manufacturing Company (TSMC), making the Californian company’s fortunes deeply intertwined with the political and economic stability of the country.
While Taiwan considers itself an independent nation – with its own constitution, elections, passport, currency, and armed forces – the Chinese government views the island as a territory of its own country.
The global response to Russia’s invasion of Ukraine demonstrated to China that, while it might face economic risks by invading Taiwan, it was unlikely to face military ones, for fear that it might ignite nuclear war.
China even rehearsed a blockade in August of last year. US military advisors said at the time that the short-term risk was low, but the medium- to long-term outlook for Taiwan was not good.
We learned this week that Warren Buffett’s conglomerate Berkshire Hathaway sold all its TSMC shares in what has been described as an “abrupt” move. He said that this was over concerns about the location, not the company, and specifically mentioned Japan as a safer investment prospect.
TSMC investing in Japanese operations
The Financial Times reports that TSMC has agreed to build a new plant in Japan, and has said that more might follow.
Seven of the world’s largest semiconductor makers have set out plans to increase manufacturing and deepen tech partnerships in Japan as western allies step up efforts to reshape the global chip supply chain amid rising tensions with China […]
The US has deployed significant diplomatic capital to urge closer alignment among its allies in the region against the perceived threat of China’s expanding technological and military powers, and to reduce dependency on chips produced by TSMC and others in Taiwan.
TSMC, the world’s biggest contract chipmaker, also expressed the possibility of more investment in Japan after it agreed to build a new plant in the south-western prefecture of Kumamoto.
Photo: Simon Launay/Unsplash
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