At a time in world history, where technology reigns supreme and geopolitical issues control economics, students should know the importance of the Taiwan microchip industry.
Many students think of microchips as just another component of their cell phone. However, microchips are not just components in phones but essential parts of the modern world. If this industry was disrupted, dire consequences would soon follow.
According to encyclopedia.com, these microscopic devices are building blocks for “scientific instruments, military weapons, personal entertainment devices, communications devices, vehicles, computers.” These tiny chips have many capabilities which make them extremely valuable. The majority of these computer chips are manufactured by one company in Taiwan.
Taiwan Semiconductor Manufacturing Company (TSMC) has been around since 1987 and is the world’s leader in the production of semiconductors and microchips. In 2022, they raked in 58.5% of all revenues made by the production of semiconductors worldwide. However, their dominance is not just with the semiconductor part of the process.
Advanced chips are important in advancing computing power in new technology. TSMC makes 90% of all the advanced computer chips that are produced worldwide. This amount of power by one company seems to not have raised many global challenges yet, but that could soon change.
Students should also know that microchips are one of the biggest players on the world stage right now due to their capabilities. This should be given attention because Taiwan faces a potential threat from China that should upend the industry.
In March, Chinese President Xi Jinping spoke against the “pro-independence” movements in Taiwan. This is the latest in stories about China wanting to take control of Taiwan, but how would that affect the chip industry?
If TSMC had to give control to the Chinese government, it would mean that one of the United States’ biggest economic competitors would have control over US technological advancement opportunities.
China, if in control of TSMC, which is investing forty billion dollars in a semiconductor plant in Arizona, would have a hand in the largest business investment ever made in the state.
This could lead to negative impacts. If China had control over the advanced chip and semiconductor market, it would allow them increased leverage against the US on economic or political issues.
This impacts college students entering the workforce because the US would still need the chips, and higher costs of materials for production would lead to fewer jobs in the tech field. As previously seen in the car market, a shortage of chips would lead to fewer jobs for salespeople of the products requiring microchips as well.
Students should be aware that microchip technology in Taiwan is extremely advanced and helps more than most can imagine in everyday life. However, the industry could soon be under attack and made more exclusive if China tries to take control.
