24.04.2024 Author: Seth Ferris

Taiwan Earthquake: Why All the Chips in One Basket?

Taiwan Earthquake: Why All the Chips in One Basket?

The powerful earthquake that shook Taiwan on Wednesday, 3rd of April, was the strongest earthquake to hit the renegade Chinese province in 25 years. The 7.4+ earthquake has killed at least nine people and injured more than a thousand, and has sent a different type of shockwave throughout the world, particularly the west.

It is telling that initial expressions of concern were not so much for the people of Taiwan, but for the production plants that have a monopoly of production of the advanced chips that so much of western technology depends.

Everything that the western public takes for granted, every time saving or entertainment device, every mobile phone, laptop, computer, every car, plane, ship or train, every power plant, water treatment facility, payment device, the devices in hospitals that scan you or keep your heart running, if it has a high-end chip in it, most likely it comes from a factory in Taiwan.

Wake-up Call!

The earthquake caused a stoppage in production of such chips for several hours, causing a loss of hundreds millions of dollars, not only to the manufacturers, but to the tech companies that need the chips for their products.

Luckily for the world’s tech companies, Taiwan has spent many years (and, I suspect, huge sums), often funded by the West, researching and implementing methods of construction to mitigate the effect of severe earthquakes on its most vital industry, and after inspection of the factories, production recommenced.

One has to question how and why chip making, particularly that involving strategic semiconductors, became so incredibly concentrated in one place, especially given the supposed aims of globalization and the idea of redundancy of supply.

Memories of convenience

The question becomes even more pointed when we remember that Taiwan is a rogue province of China, and recognized as such by the pretty much the entire world. The West has forgotten the period of Richard Nixon when it was confirmed that Taiwan was an integral part of China, and that can be written off to memories of convenience.

One answer would be technical. Concentration of productions means that the engineers that design and produce chips can pool their knowledge and more easily communicate. We see the same thing in the software field, to an admittedly lesser extent, in the famous “Silicone Valley” in California. But the other answer is greed. For decades, it was easier to produce chips in Taiwan, easier and cheaper.

Lower wages for qualified experts, generous subsidies from the Taiwanese government, which I suspect were motivated by a desire to make Taiwan too important to the US to abandon, and avoidance of environmental and labor laws, not to mention taxation issues. All these things contributed to the quite frankly, disastrous concentration of 90% of the world’s high-end chip production in Taiwan.

We should all breathe a sigh of relief that the measures taken by Taiwan mitigated the effect of such a massive earthquake, but there is another threat to the production of such vital components for the world’s economy. The elephant in the room, (or more correctly, the panda?) is the People’s Republic of China, which is becoming increasingly irritated, if not outright enraged, by the constant US meddling in Taiwan.

Such interference ranges from political support for Taiwanese politicians advocating for independence, the training and equipping of Taiwan’s military forces, to the stationing of US combat troops, mainly special forces on the islands under separatist control. It should also be noted that all of this is done in direct violation of solemn US commitments to respect the “One China” policy. It is remarkably reminiscent of US policy towards China’s ally, Russia, after the Cold War. Constant promises were made not to expand NATO, or to interfere in the internal politics of former Soviet Republics. Promises that were repeatedly broken.

Now China faces the same thing.

China has been making increasingly strident warnings about how its patience is running out, while the US, mired in an ever-increasing hemorrhage in Ukraine, and now pouring weapons it can ill afford to spare into Israel in support of Netanyahu’s genocidal campaign against the Palestinians, still mouths off that it can “successfully defend Taiwan”, albeit at great cost. Obviously, the failure of NATO planned offensives in Ukraine (not to mention the failure of much vaunted US and NATO “super weapons”) has not sunk in. It is obvious that the US military doctrine of “precision over quantity” has been found wanting in the face of Russia’s return to “industrial scale” warfare. US exercises appear to ignore the logistical depth the Chinese have, and overestimate the US ability to supply its forces across the breadth of the Pacific.

I suspect the reality would be very different indeed. So to do some US officials, with some even advocating for the destruction of Taiwanese chip factories in the case of a Chinese invasion. Needless to say, the Taiwanese government was not particularly happy with this idea, voicing their protest strongly. Unfortunately, the Taiwanese seem not to understand that the US is, at best, a fickle ally, something the Ukrainians are finding out, as the Afghans and South Vietnamese before them, the hard way.

With US military logistics strained to breaking point, it must be incredibly tempting for China, especially with the red rag of US troops on Islands near the coast of the mainland, to finally resolve the matter through force. One has to ask why the US conducts a policy that is so contrary to its international commitments, but they seem to have their reasons.

Firstly, as Bill Clinton, well-known sex pest, said, “It’s the Economy, Stupid!” with Taiwanese high-end chip production absolutely vital to the US economy and war machine. Secondly, as it has since 1948, when the defeated Kuomintang forces retreated across the straits from the mainland, Taiwan forms an “unsinkable aircraft carrier” which can place US forces within strike range of major Chines ports. The US hopes that, in conjunction with the US Navy, that Taiwan will be too bitter a pill for the PLA to swallow.

We can all agree that this used to be the case. But China has invested heavily in modernization, both by purchasing advanced 4.5 generation fighters from Russia, such as the Su-35 Flanker E, and its own home-grown 5th generation fighters like the J-20. But these are only part of the strategy, with its focus on A2/AD or Anti-Access/Area Denial, which, by combining airpower, naval assets, and advanced basing and “carrier killer” ballistic missiles, presents a formidable threat to US strategy in the Pacific.

Never Assume, Ass-u-me!

In true US style, the assumption is made that US forces remain “superior”, but I find the basis for this to be little better than a nasty blend of American exceptionalism, and outright racism. We seem to have forgotten the experience of fighting the Chinese in Korea, where the US led coalition was barely able to scrape out a draw.

It appears that the US placing of all its chips in one basket, is going to allow the Chinese to put on the sauce, and it may well be sweet for them, and sour for the US!

And in this case, the chips may be similar to eggs, and the US is precariously balancing them, and heading for a fall, and we all know what happens then!


Seth Ferris, investigative journalist and political scientist, expert on Middle Eastern affairs, exclusively for the online magazine “New Eastern Outlook”.

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