China’s Military Threats to Taiwan Could Disrupt Its Own Semiconductor Supply Chain
Following U.S. House Speaker Nancy Pelosi’s visit to Taiwan in early August, the Chinese Communist Party (CCP) threatened to normalize military exercises in the Taiwan Strait. But this action could disrupt China’s own critical supply chain.
China is the biggest consumer of semiconductor chips in the world, but its production rate is less than 20 percent of its needs.
According to an October 2020 report from the Congressional Research Service, China accounts for 60 percent of the global semiconductor demand, and more than 90 percent of the semiconductors used in China are imported or manufactured locally by foreign companies.
In particular, electromechanical products, which account for half of China’s export revenue, including automatic data processing equipment, cellphones, home electronic appliances, automobiles, and ships, all rely on chips as an essential component….