Reuters, July 2: “Terry Gou, the billionaire founder of Taiwan's Foxconn, along with TSMC reached initial agreements to each buy 5 million doses each of BioNTech SE's COVID-19 vaccine on Friday, three sources with knowledge of the situation told Reuters.”
Taiwan News, July 13: “Morris Chang (張忠謀), the 90-year old founder of chip giant Taiwan Semiconductor Manufacturing Co. (TSMC), will represent Taiwan at a July 16 Asia Pacific Economic Cooperation (APEC) virtual summit, President Tsai Ing-wen (蔡英文) announced Tuesday (July 13).
Chang has previously represented the president and country at APEC summits in 2006, 2018, 2019, and 2020. Because of obstruction by China, presidents of Taiwan have never been able to attend the organization’s annual summits.”
Reuters July 15: “Mark Liu, Taiwan Semiconductor Manufacturing Co Ltd's chairman, told an earnings call [..] no country wants to see instability around Taiwan.
"As to an invasion by China, let me tell you everybody wants to have a peaceful Taiwan Strait. Because it is to every country's benefit, but also because of the semiconductor supply chain in Taiwan - no one wants to disrupt it."
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In what other country does the largest corporation step in to acquire vaccines in place of the government ?
Which other public company CEO dives so deeply into geopolitics on an earnings call ?
What other corporation founder sits in for his country’s President at international summits ?
Taiwan Semiconductor Manufacturing Co is anything but a normal corporation. Its huge role in the world’s current supply chain makes it unique. It IS Taiwan for all practical purposes and is the public proxy for its business and political leaders. This publication has covered the semiconductor shortage since April, assessing that Taiwanese semiconductor chips are the new Saudi oil fields.
TSMC’s outsized role in the global supply chain across key industries is only now reaching its breaking point. This writer’s view remains that TSMC is akin to Saudi oil fields, insofar as their defense proved too much to stomach and kickstarted the domestic shale oil&gas boom.
Likewise giant deals are being put together eg the $50B Intel-GlobalFoundries acquisition, just as investment by other tech giants is accelerating.
Taiwan will, just as the Saudis, lobby to delay the onshoring of their key industrial asset but they’re realists.
This is why TSMC is gearing up to build a huge facility in water-challenged Arizona, due to intense wooing from the state.
TSMC has also responded favorably to building a foundry in Germany and one in Japan, to better serve their customers in each market.
TSMC is not a normal corporation and Taiwan is not a normal country, as it’s wedged between an autocratic nationalist communist China and its Korean and Japanese neighbors who’ve forcefully stated their interest in defending Taiwan’s self-governance.
The latest assessment for semiconductors portends that the current shortage will last until well into 2023.
TSMC being a proxy for Taiwan could also mean the country and its main economic player will leverage their outsized role in our global supply chain to the maximum.
This writer forecasts that mainland China will not try to go beyond certain boundaries in its handling of the Taiwan question because the CCP needs Taiwan-based Foxconn to remain large employers of mainland Chinese citizens.
There is a subtle game afoot between Taiwan and the CCP, where geopolitical and domestic clannish interests clash with the demands of the global supply chain. In 2020, this publication forecasted that 3 Chinas on a collision course: mainland China, Hong Kong and Taiwan
“Taiwan is most surely brokering a deal with Beijing, both for itself and for Hong Kong.
The deal terms could be: “we Taiwan and Hong Kong serve a useful purpose for China as IP developers and operators of world class companies for one, the main financial hub in the region for the other. Let us pursue our common paths, which reinforce each other, without undue friction. Should you, Beijing, resort to force in Hong Kong and/or Taiwan, you will further shed the few remaining lumps of credibility you still possess.
There is more than one way to be Chinese and successful, we in Taiwan and Hong Kong have embraced democracy because our societies mandated it. We recognize this is not (yet) the case in the mainland and that is something we cannot and will not interfere with. Let us live in peace with each other, as Chinese cousins, and rebuild the goodwill we have lost in 2020.”
Xi’s next moves will show us if this path is possible or if he truly wants to gamble the CCP’s position and his own.