Friday, June 9, 2023

China-Taiwan tensions threaten boycott of EU chip plan

Although it seems distant, the pandemic has put the European economy between a rock and a hard place. It did so in a number of ways, but supply chain cuts and blockades of ocean-transport goods only exacerbated the microchip crisis that has ravaged the automotive sector. Almost forced to paralysis. And Brussels has taken action to avoid a similar situation by giving birth to the CHIP law.

The idea behind this proposal is Block will have 20% market share of semiconductors in 2030. A figure that represents a significant increase from the 10% concentrated in 2020. But its main purpose is to respond to European industry in the event of a crisis. An attempt to avoid the scenes seen during Kovid.

However, there may be vigorous US efforts to prevent China from accessing Western microchips Increase offer in the market And put the European plan to promote the industry against the ropes. As Taiwan, the main producer of advanced semiconductors, stops marketing its output to Beijing, it will have to turn to other hungry markets, such as the bloc.

The semiconductor crisis, which hit the EU automotive industry with such virulence during the pandemic, has forced Brussels to respond. Already when the lockdown and essential services were behind us, vehicle factories in the European Union experienced a halt in their shifts. production seen forced to take custody and reduce shifts The lack of microchips from Asia caused pauses everywhere.

“Chip Law is a way to change how we did things in the past“, sources in the Community Executive state, regarding the shifting of production. A lesson for which they now call for a “more holistic” perspective through research.

According to community sources, there are fifty production centers in the block, for which an update would not hurt, given the tendency in recent years to relocate manufacturing, including semiconductors. “we have to Strengthen your position in various directions Mainly in the digital one”, has justified community sources.

A perspective that was rejected by the European Semiconductor Industry Association (ESIA), pointing out that the Community market produces chips focused on the automotive and industrial sector, while Taiwan focuses more on telecommunications industry and data centers.

On the global scene, in any case, the EU may have to rethink its strategy. Taiwan produces 90% of the world’s advanced microchips. In addition, according to ESIA data, it accounts for 17% of the world’s microchip production capacity, followed by China’s 23.5%, Korea’s 18.8%, and Japan’s 15.6%. On this map, the European Union currently holds 7.5% of the pie compared to the United States’ 9.6%. Two sectors that are still trying to restore their production capacity after the pandemic. And it’s worth considering that the Biden administration last summer provided a juicy take on its chip legislation. $52.7 billion subsidy package To strengthen local semiconductor production.

For its part, the EU seeks to strengthen its strategic autonomy. But conflict between China and Taiwan could tilt the EU market in favor of advanced semiconductors from the territory. When asked about this scenario, community sources have been optimistic: “We believe that We can cooperate with our partners establish mutual dependence in this context”.

What it refers to is more of an exchange of interests and less of direct competition. and he is Taiwan needs some technologies produced in the EU which are important in the production of advanced chips. “It is a very complex ecosystem of expertise in different areas of the supply chain,” recall sources similar to the European Commission.

In any case, the semiconductor industry is clear that its main market is in Asian countries according to ESIA. The issue is certainly complicated when it comes to China and Taiwan, because if the United States has done more than a tacit military offer to Taiwan, the EU has tried to distance itself. maintain strained relations with Beijing,

Illustrating this position are the words of Marie-Agnes Strack-Zimmermann, chairman of the Bundestag Defense Committee, on a visit to Taipei, who said that “it is not about sending arms to Taiwan.” And he marked the difference between the Community position and the American position: “Here the position is different. Our role is less military. It is an economic question.”

To this equation we must add the pressure from the Biden administration months ago Tries to block sales of advanced semiconductors to China, as well as the tools needed to make them. The effort to deny Beijing access to high-end chips for artificial intelligence, supercomputing or weapons, which adds to restrictions on exports of certain technologies to the Asian country. Something that also puts pressure on the EU to do something.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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