Tensions between China, US, Taiwan over chip production rise before Trump’s taking office
Date
11/12/2024 8:13:42 AM
(MENAFN) Tensions between China, the US, and Taiwan over Semiconductor production have been escalating in recent years. Following President-elect Donald Trump’s victory, there are growing predictions that the US could soon dominate the global chip market. A key incident fueling these tensions occurred when Taiwan Semiconductor Manufacturing Company (TSMC) allegedly discovered one of its chips in a Huawei AI product. This was particularly controversial as Huawei is listed among the companies restricted by the US government.
In response to the growing strain, the US Department of Commerce issued an order for TSMC to halt shipments of advanced chips to China. TSMC announced that it would suspend sales of chips with a 7-nanometer or smaller design to Chinese chipmakers starting this week. Huawei, however, clarified that it is no longer manufacturing chips through TSMC following the new restrictions.
Taiwan, currently the world’s largest producer of semiconductors, holds a dominant 68 percent share of global chip production as of 2023, according to data from Visual Capitalist. However, Taiwan's market share is expected to decline to 60 percent by 2027, as the US pushes forward with efforts to increase domestic chip production, driven in part by the CHIPS and Science Act of 2022 and potential policy changes under President-elect Trump.
The US is expected to make significant strides in chip manufacturing by 2027, with its production share increasing from 12 percent to 17 percent. This growth is anticipated to be bolstered by investments in domestic production. Taiwan’s largest clients include major US tech companies like Nvidia and Apple. South Korea, with a 12 percent share, and China, holding 8 percent, follow in chip production.
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