KEY POINTS

  • TSMC produces modern chips used by many American tech companies
  • TSMC's chairman says the North American electronic industry would be hard hit if China invades Taiwan
  • A new legislation aims to help secure the supply of modern chips in the U.S.

Americans would likely see the prices of certain smart devices and tech commodities rise if China were to invade Taiwan, an expert said.

Speaking to CNN’s Fareed Zakaria, the chairman of Taiwan Semiconductor Manufacturing Co. (TSMC) Mark Liu, said a war between China and Taiwan would only yield losers, adding that an invasion could force the company to stop its operations. TSMC owns the most-advanced chip factory in the world that makes processors for many American tech companies, including the A-series and M-series chips found in Apple products such as the Macbook.

The CNN interview was released Monday.

“Nobody can control TSMC by force. If you take a military force or invasion, you will render TSMC factory not operable,” Liu said in the interview. “Because this is such a sophisticated manufacturing facility, it depends on real-time connection with the outside world, with Europe, with Japan, with U.S., from materials to chemicals to spare parts to engineering software and diagnosis.”

Should China invade Taiwan, Liu said the North American electronics industry would be hard hit. North America represents roughly 65% of TSMC’s revenue. China also accounts for 10% of the company’s profits and risks creating turmoil in its own economy should it invade Taiwan.

Liu’s remarks were aired as tensions between China and Taiwan have escalated over the past few days as the U.S. Speaker of the House Nancy Pelosi visits Taipei. China condemned Pelosi’s visit to Taiwan and responded to what it perceived as a “threat to peace and stability” by sending 21 Chinese warplanes into Taipei’s air defense zone and suspending several agricultural imports from Taiwan.

Pelosi met with Taiwanese President Tsai Ing-wen on Wednesday and commended his country for being “one of the freest societies in the world.” Additionally, she also said the Chips and Science Act, a new U.S. legislation passed by the House last week, would offer an opportunity for the U.S. and Taiwan to strengthen their economic cooperation.

The new legislation, called the Chips and Science Act, would set aside billions of dollars in incentives to build chip factories on U.S. soil and help secure the supply of modern chips in America should China invade Taiwan.

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Representation. A laptop. brenkee/Pixabay
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