China accused Taiwan's leadership of putting the already strained global semiconductor supply chain at risk by pursuing policies that raise tensions in the Taiwan Strait.

An editorial in the English-language Chinese newspaper Global Times on Friday argued that the island's leadership is "playing with fire" by escalating regional tensions that cause foreign capital flight from major Taiwanese semiconductor manufacturers.

"The Taiwan chip industry is facing a historic foreign capital flight amid the escalating tense situation in the Taiwan Strait sparked by Taiwan regional leaders, combined with the potential risks of a supply chain cutoff due to the ongoing tensions in Europe," read the editorial.

The editorial provided data of a sizable decline in the foreign shareholder ratio in the island's semiconductor manufacturers like Taiwan Semiconductor and MediaTek.

The semiconductor industry is truly global. The design, development and production of semiconductor products is an integrated world process rather than the sum of separate national production processes. The division of labor within corporate borders assumes a far more critical role than the division of labor across corporate and national boundaries. Semiconductor products are designed in one country, developed in another country, manufactured in a third country and sold in the global economy.

Taiwan plays a crucial role in this global industry. Companies like Taiwan Semiconductor (TSM) and MediaTek manufacture chips designed and developed by American, European, Japanese and Chinese semiconductor companies, like Intel, AMD, Broadcom, Huawei Tech, NVIDIA Corporation, Qualcomm Inc., NXP Semiconductors and Sony Corporation.

In recent months, the world's supply chain has been under strain due to COVID-19 production shortfalls and material shortages caused by the Russia-Ukraine war. And China makes an excellent point to be concerned about the impact of further industry interruptions should tension in the Taiwan Strait get out of control.

"The semiconductor industry is particularly in need of a stable and predictable security environment," continues the editorial.

"The capital is very sensitive to the signals released by Taiwan authorities, and some believe that such signals may lead to an increase in the possibility of conflict in the Taiwan Strait, which partially contributed to their withdrawal," Ma Jihua, an industry veteran, told the Global Times on Friday.

While it's very much debated who is the source of rising tensions in the Taiwan Strait, Beijing's claims that capital flight destabilizes the island's semiconductor industry are exaggerated. Last month, TSM reported a net revenue increase of 37.9% from February 2021. Revenue for January through February 2022 totaled $319.11 billion, a rise of 36.8% compared to the same period in 2021. Over the last three months, TSM shares have been down 11%, in line with the tech-heavy Nasdaq index.

Foreign capital flight doesn't seem to impact the company's market valuation significantly, thus far.

But the situation could change if the Russia-Ukraine war lingers for much longer and tensions in the Taiwan Strait get out of control.

Beijing should do its part to make sure that this doesn't happen. It has plenty of means at its disposal.