Nancy Pelosi’s controversial visit to Taiwan reportedly included a meeting with TSMC Chairman Mark Liu to discuss the Chip Law regarding the chipmaker’s Arizona plant. The plant is expected to produce chips for Apple.
China is extremely dissatisfied with the visit and in response announced military exercises with rescue fire in the waters near the island …
Background
If you’re not familiar with the Chip Act, here’s a summary of the history…
The Senate last year approved $52 billion in funding to increase U.S. chip production, and the House of Representatives added its support in February this year. The motivation was twofold. First, to address the global chip shortage that arose during the pandemic. Second, the desire to ensure that the US is not left behind China.
Apple lobbied for cash, which TSMC said was “vital” to its chip manufacturing plant in Arizona.
The CHIPS Act became the CHIPS and Science Act after additional funding was added for broader spending on science, education, and defense. Of the $52 billion earmarked for U.S. chip manufacturing, Intel is reportedly claiming one-third of the total.
Nancy Pelosi’s visit to Taiwan
Pelosi’s visit to Taiwan, which ended today, was meant to show US support for Taipei at a time when concerns are growing over a possible Chinese invasion. It is meant to show Beijing that the US is serious about its legal obligation to help Taiwan defend itself against any Chinese military attack.
However, many expressed concern that the visit would provoke China rather than contain it. This would seem to be confirmed by Beijing’s extremely aggressive statements.
In a statement released on Wednesday, Chinese Foreign Minister Wang Yi said “those who play with fire will not get a good end, and those who insult China will be punished.”
“The United States is violating China’s sovereignty under the guise of so-called democracy,” he added.
This was followed by the announcement of numerous live-fire military exercises in the waters around the island, with China openly acknowledging that some of them may be taking place in Taiwan’s territorial waters.
The exercise, which begins Thursday and lasts five days, will take place on some of the world’s busiest waterways and will include “long-range live ammunition firing.”
A US official told the Reuters news agency on Wednesday that Beijing may try to use the visit to stir up tensions. Chinese Defense Ministry spokesman Sun Li-fang acknowledged that some of the exercises could violate Taiwan’s territorial waters.
Exclusion zones around military exercises are likely to prevent the delivery of supplies from Taiwan.
TSMC meeting
It is reported by Bloomberg.
One of Nancy Pelosi’s key encounters on her whirlwind tour of Taiwan is reportedly TSMC, the island’s most valuable company and the world’s largest contract chipmaker.
The Speaker of the US House of Representatives meets Wednesday with Taiwan Semiconductor Company Chairman Mark Liu to discuss the recently passed Congressional Chip and Science Act and its $52 billion subsidies for new chip factories on American soil.
There has been speculation that TSMC may have a lower priority in obtaining funding from the Chip Act, and the chipmaker has indicated that this could slow the pace of development of its Arizona plant. When it goes live, it is expected to produce some of Apple’s A and M series chips.
Pelosi may have been looking to give confidence that the company will receive at least some funding, or get a better idea of what level of funding the company will need to meet its 2024 production targets.
Intel’s bid for a large portion of its $52 billion chip manufacturing subsidy has been met with controversy. Some say that Intel, as an American company, should take precedence. Others have argued that it would be a waste of good money for bad, given that the American chip maker has allowed itself to fall so far behind TSMC and Samsung in its manufacturing capabilities.
Pelosi left Taiwan.
Photo: US Department of Labor/Public Domain
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