Semiconductors

Experts warn of dependence on Taiwan

There is a constant risk of the conflict between Taiwan and the People's Republic of China escalating, explained Gaydoul.

(Bild: SweetBunFactory)

In view of the enormous importance of chips, experts have warned of the risk of existing dependence on semiconductors from Taiwan. According to the management consultancy Horváth in Stuttgart on Thursday, companies from Europe should create reserves, set up semiconductor factories outside Taiwan and strengthen global supply chains.

However, there are hardly any alternatives in the short term, especially for state-of-the-art chips. "Europe is now investing in building up its own semiconductor capacities, but dependence on Taiwan will remain," explained Ralf Gaydoul, Partner at Horváth. Taiwan's position on the global market is particularly clear when it comes to highly developed chips, which are also important for modern vehicles: 92 percent of these special semiconductors come from Taiwan.

There is a constant danger of an escalation of the conflict between Taiwan and the People's Republic of China, explained Gaydoul. China regards Taiwan as a renegade province and wants to reunite the island with the mainland, by military means if necessary. China has repeatedly threatened Taiwan in the past and held military maneuvers near the island.

Danger of shortages even without an escalation of the conflict
The automotive sector is particularly dependent, Gaydoul explained. Due to the sharp rise in demand in this sector, shortages could arise even without an escalation over Taiwan. "The global automotive market is growing, vehicles are becoming more electric and new production capacities are not being created quickly enough." Another semiconductor crisis, such as the one between 2020 and 2023, is only "a matter of time".

Companies in Germany and Europe would have to deal with the dangers and establish an early warning system. They also need strategic reserves for critical components and better international networking, including with potential alternative suppliers. According to Horváth, investment in research is also needed in order to develop new technologies.