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Taiwan, which China regards as a province, is being courted for its capacity to make leading-edge computer chips. That’s mostly down to Taiwan Semiconductor Manufacturing Co., the world’s largest foundry and go-to producer of chips for Apple Inc. smartphones, artificial intelligence and high-performance computing.
Taiwan’s role in the world economy largely existed below the radar, until it came to recent prominence as the auto industry suffered shortfalls in chips used for everything from parking sensors to reducing emissions. With carmakers including Germany’s Volkswagen AG, Ford Motor Co. of the U.S. and Japan’s Toyota Motor Corp. forced to halt production and idle plants, Taiwan’s importance has suddenly become too big to ignore.
U.S, European and Japanese automakers are lobbying their governments for help, with Taiwan and TSMC being asked to step in. German Chancellor Angela Merkel and French President Emmanuel Macron discussed the potential for shortages last year and agreed on the need to accelerate Europe’s push to develop its own chip industry, according to a French official with knowledge of the matter.
The auto industry’s pleas illustrate how TSMC’s chipmaking skills have handed Taiwan political and economic leverage in a world where technology is being enlisted in the great power rivalry between the U.S. and China — a standoff unlikely to ease under the administration of Joe Biden.