Business is following the worsening of the Taiwan conflict with great concern. The chip industry is apparently already feeling the danger of an escalation. Customers of the largest Chinese semiconductor manufacturer suddenly cancel their orders.
The Taiwan crisis apparently triggers great unrest in the chip industry. The head of China’s largest semiconductor manufacturer, Semiconductor Manufacturing International Corporation (SMIC), Haijun Zhao, warns that increasing geopolitical tensions, high inflation and a cyclical downturn in demand have triggered a “certain panic” in the industry. This is reported by the “Financial Times”. The CEO explained that customers canceled their orders abruptly.
Parts of the supply chain came to a standstill extremely quickly. Zhao didn’t mention Taiwan directly — he cited a combination of factors, including a regional conflict overseas, as the reason for the development. According to the report, ex-army chief Tudor Brown resigned from the SMIC board on Thursday, saying the international divide had continued to widen.
Zhao said the biggest drop in demand was for chips used in smartphones and consumer electronics. Sales by Chinese smartphone manufacturers shrank by half in the first half of the year. “We see that many orders have been stopped.” The demand for chips for industrial controls or automotive applications, on the other hand, is stable, and there are still supply bottlenecks in these segments.
The foreign trade chief of the German mechanical engineering association VDMA, Ulrich Ackermann, had told ntv.de that many companies are currently thinking about their future China strategy. It is about the question of how they can prepare for the consequences of a drifting apart between the USA and China. Because of corona-related disruptions and transport problems, companies have been restructuring their supply chains for some time.
However, an economic decoupling from China would cost Germany dearly. The country is Germany’s most important trading partner. The German economy is correspondingly concerned about the worsening of the Taiwan conflict. In the event of a military escalation, the US could tighten sanctions against Chinese tech companies. Germany, too, could then find it difficult to evade sanctions.
