Taiwan has no closer friend than the US when it comes to military and diplomatic support, but now Taipei is getting nervous that American warnings about the risk of a Chinese attack could hurt the island's business environment. Taiwanese officials are quietly urging their US counterparts to tone down their rhetoric about the dangers of relying on supplies from Taiwan Semiconductor Manufacturing Co., the industry's leading producer of high-end chips used for things like smartphones and AI. As Debby Wu and Jenny Leonard explain, their ire is particularly focused on Commerce Secretary Gina Raimondo, who recently called America's dependence on Taiwan for more than 90% of its most advanced chips "untenable." But the frustration crosses US party lines: A top Republican lawmaker, Michael McCaul, said the "window's closing" on diversifying supply chains. Taiwan has recognized the need to spread out some of its production — it's committed to a $40 billion project in the US state of Arizona — but it also wants to keep manufacturing the most valuable chips on the island. Its worries aren't theoretical: Warren Buffett's Berkshire Hathaway cut its holdings in TSMC by 86% in the fourth quarter, with the billionaire citing geopolitical risks over Taiwan as the main reason. And the tensions are worsening. US President Joe Biden plans to sign an executive order soon to limit American investment in key parts of China's economy. Taiwan remains a fundamental focus for Beijing, with Chinese Foreign Minister Qin Gang calling it the "core of the core interests of China." "Those who play with fire on Taiwan will eventually get burned," Qin said at a forum in Shanghai today. While Taiwan's ruling party previously benefited from warning of Chinese overreach and has trumpeted the dangers posed by Beijing for months, now it's looking to tone things down to avoid any long-term economic fallout. — Bill Faries |
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