Wednesday, November 29, 2023

UK government advocates reducing country’s dependence on Taiwanese chips

Britain must reduce its reliance on Taiwanese microchips at risk of Chinese interference or invasion in Taiwan, warns a provisional document for internal use by the British government by Rishi Sunak.

This unpublished government document, to which Bloomberg has had access, points out that a Chinese incursion into the self-governing island would compromise the supply of chips, “vital” for the automotive and electronics industry.

Up to 90% of the world’s high-performance chips are manufactured in Taiwan, with local firm TSMC occupying a pre-eminent position in the market.

In addition, China has been proactive and has invested in chip industries in other countries. Such is the case that the British Government forced the Dutch company with Chinese capital Nexperia to divest in 2022 of 86% of the investment it had made in the English company Newport Wafer Fab on the grounds of national security.

However, substituting Taiwanese components is not easy due to the lack of alternatives.

Both the United States and the European Union have put million-dollar investment plans on the table to create a competitive microchip industry within their borders.

To this end, Washington has created through the US Chips Act an investment plan of US$53,000 million (€48,900 million), and Brussels aspires to manufacture 20% of the world’s chips with a fund of €43,000 million.

The United Kingdom, by contrast, still does not have a clear roadmap in this regard.


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