If tensions escalate between the U.S. and China, or much more seriously between China and Taiwan, any disruption in supply at TSMC could cripple some of the most important U.S. tech companies, especially Apple, Nvidia, AMD, and Qualcomm, says The Diplomat author, Mercy Kuo.
During the article, a conversation with Dr. David Yoffie, Professor of International Business at Harvard, Kuo writes that for tech companies such as AMD and Nvidia, failure to gain supply could lead to loss in market share and a reduction in their lead over Intel.
“For Apple, it depends on how TSMC allocates capacity. Today, TSMC appears to give Apple priority because it such a large and important customer. If Apple retains its position at the top of the queue, it may not be severely impacted, even if the shortages persist for a longer time,” writes Kuo.
According to the author, U.S. policymakers and business leaders should mitigate risks to U.S. companies reliant on chip production by creating sufficient capacity within the U.S.
“The Biden administration would like to provide about $50 billion in aid to the American semiconductor industry to facilitate more rapid building of new capacity to meet demand. But there are only two domestic manufacturers in the U.S.: Intel and Micron. Today, the vast majority of their production is used for their own chips.”
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