Is that it?
There is a global dependency on TSMC in Taiwan for advanced semiconductors. The amount of investment required to create an equivalent to their chip fabrication facilities is more that governments or industry can pay.
This represents an EU response to this choke point. The US is trying to do the same, largely through Intel. China has been investing for years to create such a capability but with limited success. It requires investments of hundreds of billions with no guarantee of success.
This is part of the economic poker game between the major economic blocs for who controls advanced chip making.
The EU has a key asset in ASML who make the critical tools that TSMC uses. The investment would probably go to supporting the network of companies it uses. It is a business with very long, very big investment cycles that requires government support.
The UK is not much of a player in this semiconductor game. Though, like much of the world, it would be seriously effected if there were any interruption to the supply chain should it be compromised by any drama between China and Taiwan.
Liz Truss was over in Taiwan recently, making the case for an ‘economic NATO’ to see off threats from China.
I expect there were some wry smiles from those politicians with a firmer grasp of economic reality.
I just read ‘Chip War’ by Chris Miller and feel much better informed about the semiconductor business and how the dependency on Taiwan came about.
Biting the hand that feeds IT
