The latest issue of the Economist features Taiwan on the cover. The headline is “The most dangerous place on Earth”. The graphic of the cover is a map of Taiwan, which is at the center of a radar screen. Some spots of light representing the naval fleets of the People’s Liberation Army of China and the US Navy are respectively on the left and right sides of the island.
Taiwan’s stock market has grown 20 percent
The cover article points out that America’s long-standing policy of “strategic ambiguity” towards Taiwan is breaking down, making it highly likely for a cross-strait conflict to break out. The author notes that while the US tries to avoid going to war with China, if China invades Taiwan and the US does not send its troops to defend the island, its allies around the world would know that they could not count on it, and the US would lose its status as a power that governs the world.
Ironically, the most dangerous place on Earth as described by the Economist is home to the most profitable stock market in the world so far this year. The Taiwan Capitalization Weighted Stock Index has risen by 20 percent, outperforming all major stock markets in the region. Following it is the stock market of Singapore, which has recorded a growth rate of 13 percent. Meanwhile, major indexes in Europe and the US have expanded by about 10 percent (see the chart), and Hong Kong’s Hang Seng Index ranks low with a five percent gain. The worst performer, however, is China, with the CSI 300 down by nearly two percent.
Taiwanese stocks have been doing well this year. Companies in various sectors, including shipping, resources and finance, have helped push up the Taiwan Capitalization Weighted Stock Index. The biggest contributor, however, is Taiwan’s semiconductor industry. Recently, many companies, from Apple that is the most valuable brand in the world, to Samsung, which produces its own chips, to leading car manufacturers in Europe, the US and Japan, are all facing a chip shortage. In the next few quarters, the production capacity of these companies may be affected. Taiwan is the global hub of semiconductor and chip production. TSMC, being a contract chip maker with the highest valuation and using the most sophisticated technology, accounts for 84 percent of the most cutting-edge chips in the world. Should production at TSMC be suspended, the world’s electronics industry would grind to a halt.
Whoever controls the field of semiconductor is the one who drives the future development of science and technology. This is no nonsense. Although the problem of chip shortage can be resolved in a few seasons, the high-tech industry supply chain is not something that can be established in a short period of time. Taiwan accounts for 30 percent of the world’s semiconductor output, thanks to its robust technical foundation and comprehensive supply chain. For Taiwan, TSMC is a company that defends the island. But then over the past two decades, upstream and downstream sectors in Taiwan have together given rise to an integrated semiconductor supply chain. Apart from foundry, Taiwan’s integrated circuit (IC) design, packaging and testing sectors are also excellent. MediaTek’s global industry ranking is number three, after America’s Broadcom and Qualcomm. In terms of IC packaging and design, Taiwan is the world’s number one, with ASE Technology being the global leader.
In the five years to come, the semiconductor industry will continue to grow exponentially. Meanwhile, 5G and artificial intelligence will bring profound changes to the world, and, according to TSMC founder Morris Chang, the Internet of Things will be the “next big thing”. The development of all these technologies hinges upon an engine: the semiconductor technology. Last month, US President Joe Biden unexpectedly convened a technology conference, which gathered leaders of big global technology firms to discuss how to strengthen America’s semiconductor industry. Biden pointed out that with China intending to dominate the semiconductor supply chain, the US should reinforce its own semiconductor industry and that investing in the sector brooks no delay.
Responding to the Economist report, Taiwanese President Tsai Ing-wen admitted that mainland China does pose a threat to Taiwan, but she said the Taiwanese government is capable of keeping risks under control and defending the island. Without doubt, it would be self-deceiving to say Taiwan is capable of resisting the Chinese Communist Party by force. Taiwan’s semiconductor industry is the island’s strongest weapon, but it is also the most fragile one. If it ever comes under attack, can the US pretend nothing happens?
In conclusion, let me quote the opening of Charles Dickens’ “A Tale of Two Cities”. May everyone hope for the best but expect the worst.
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”
Click here for Chinese version
We invite you to join the conversation by submitting columns to our opinion section: Opinion@appledaily.com
Apple Daily reserves the right to refuse, abridge, alter or edit guest opinion columns for accuracy, length, clarity, and style, and the right to withdraw and withhold columns based on the discretion of our editorial page editors.
The opinions of the writers do not necessarily reflect the opinions of the editorial board.
Apple Daily’s all-new English Edition is now available on the mobile app: bit.ly/2yMMfQE
To download the latest version,
Or search Appledaily in App Store or Google Play