This is an ongoing crisis shake up the global automotive industry and which could worsen in the coming months. Tensions around semiconductors are again on the fore following tensions between China and the United States following Nancy Pelosi’s visit to Taiwan. The President of the House of Representatives, number 3 of the American government, provoked the wrath of the Chinese government who promises a military massacre in the coming hours. A situation that is likely to have a very bad impact on semiconductor manufacturing.

Number one in semiconductors sounds the alarm

TSMC is the world’s largest semiconductor manufacturer. The company supplies products for the automotive, computer and aviation industries. The company works in particular with the largest companies, such as Qualcomm and Apple. A giant who represents 50% of the world market. China has been seeking control of the island of Taiwan for several years, specifically to control this semiconductor factory.

It’s a threat that worries the CEO of TSMC, who gave an interview to our CNN colleagues on Monday to warn of the next tension around semiconductor manufacturing. TSMC CEO Mark Liu especially afraid of a military invasion by China in Taiwan. According to him, “No one can control TSMC by force. In the event of the use of military force or an invasion, TSMC facilities will be out of order.”. Mark Liu also clarifies that the company “depends on real-time communication with the outside world, with Europe, Japan and the United States.” Therefore, he explains that blocking the company would be a huge loss for the whole world, especially for China and the US. Major customers of TSMC.

🇹🇼🇨🇳China is closing off areas near Taiwan for military exercises that are increasingly resembling a blockade.

If the PRC is talking about a violation of its sovereignty by the US with the removal of Pelosi, I don’t think an invasion of Taiwan will happen anytime soon. pic.twitter.com/NwD59BvKXv

— Delphi Observatory (@ObsDelphi) August 3, 2022

Should we be afraid of a new deficit?

If the situation continues to escalate, it is feared that a a new semiconductor crisis points to the tip of the nose. Just when the situation in the auto industry started to calm down, it could become tense again. Because China is multiplying military exercises in the Taiwan Strait. A troubling military presence as the Chinese navy could complicate the routing of microcircuits by blocking container ships departing from Taiwan.

Therefore, the giants of the automobile industry are closely monitoring the situation. Further delays are possible with the supply of microcircuits worsen an already tense situation. The auto industry hopes to return to normal in the first half of 2023. In this sense, many brands have set production and delivery times. Some may not recover after further delays.

Another threatincreasing the cost of access to microcircuits. If the route or production becomes difficult in Taiwan, the price of the chips may increase. This would have an impact on prices for new carsin general already very high.

Europe strives for independence in the field of semiconductors

In order to face the crisis, investments are multiplying. Europe will invest 43 billion euros in the next few years. The plan aims to quadruple chip production in Europe by the end of the decade. Many countries also invested on their part to produce more. This is especially true Spain invests 12 billion in semiconductorsincrease production over the next three years.

EU member states agreed that striving for industrial independence in chip production is more than necessary. The European Commission wants to promote the construction of a semiconductor plant in Europe. Companies that will contribute security of supply » on the continent will use accelerated procedures for obtaining permits for construction and operation. First of all, they will have access easier state funding through state aid. Brussels also wants to regain control of semiconductor production in case of shortages. Thus, factories, for example, will be obliged to prefer European contracts to their customers operating outside the European Union.