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Britain will try to reduce dependence on Taiwanese chips - it is fraught with a threat to the country's economy.

Published: 2023-01-20

The UK government should take steps to reduce the country's dependence on Taiwanese semiconductors because of the threat posed by China.

Chinese intervention or an invasion of Taiwan would jeopardize the British economy, the document says, because the island hosts more than 90% of the manufacturing facilities for all advanced chips - primarily TSMC. Semiconductor components are used everywhere from phones to cars, and shortages experienced during the pandemic have the potential to disrupt supply chains throughout the economy. The fact that the government is silent about this problem can disappoint foreign investors.

Thus, the supply of chips acquires great geopolitical and economic importance, which means that the UK should diversify industry supplies with semiconductor manufacturers from other countries friendly to the kingdom with a calmer environment, the strategy says.

On the other hand, Taiwan's dominance of the industry indicates that alternatives will not be easy to find, and multibillion-dollar investments will be required to develop British manufacturing. For comparison, the European Union plans to allocate €43 billion for these purposes, while the US already considers the previously approved $52 billion to be insufficient. on materials other than silicon — for example, they are actively used in 5G equipment, electric vehicles and other modern areas.

The British government has so far called this information "speculation" and noted that the strategic plan will be published "in due time." Nevertheless, the issue is being discussed, and the final version of the document will touch upon aspects of the UK's foreign and defense policy. Prime Minister Rishi Sunak has been less harsh on China than his predecessor, but is expected to divert resources to the Indo-Pacific region to hedge against potential mainland Chinese aggression against Taiwan. And Chinese companies will finally lose the opportunity to buy British semiconductor manufacturers - a case in point was the story of the Welsh plant Newport Wafer Fab.