Is A Conflict In Asia Inevitable?
Randy Wolken, President & CEO

Many believe that it is just a matter of time before China invades Taiwan. For decades, China has made it clear that it believes Taiwan is not a separate country but is instead a part of China. In recent years, the nature of this situation has only worsened. What is to stop China from invading and taking over Taiwan, which produces the vast majority of advanced semiconductor chips for world markets?

Economic realities and domestic needs are the likely reasons an eminent conflict is doubtful. China depends on Taiwan today for nearly 40% of its semiconductor imports and over 60% when you factor in U.S. allies like South Korea and Japan. These chips are needed to fuel the modern economic growth engine of an advanced economy needed to produce jobs and prosperity. Unlike raw materials, these chip factories and their ecosystems would be destroyed in an attack on Taiwan. China can ill-afford to ruin its economy to gain the future use of Taiwan, whose actual value lies in its economic might and not in its raw materials, land, or large population.

Markets, which can be a good predictor of what will happen in the future, are pricing to continue the status quo. I also predict that China will not invade Taiwan at this time. However, that does not mean we should become complacent. The U.S. should take action to reduce the world’s dependence on Taiwan for such a vital element of a modern economy.

Actual conflicts are often preceded by preparing stockpiles of ammunition and other resources. It is worth noting that Chinese companies are stockpiling plenty of chip-making equipment and parts. Why are Chinese companies doing this? Tougher export restrictions from Western countries such as Europe and the U.S. means it will be harder to get such equipment in the near future. China is growing its own advanced chip capacity and needs key pieces of equipment to make the transition. It also will lessen the need of China for Taiwan’s advanced chip-making industries.

What should we be doing in U.S. manufacturing? We need to take this moment and build our advanced manufacturing industry with a large amount of chip production like those created by Micron here in Central New York. Advanced memory chips and related high-tech manufacturing are unique opportunities for New York. We can be successful at growing its presence in our state. Over the next two decades, we can completely transform our communities and a broad range of industries by making New York State a place to make things for the 21st-century economy.

MACNY – The Manufacturers Association is taking the lead in helping member companies and other future advanced manufacturers expand and locate here. Our services and network lowers risk and increases the chance of success. Please let us know how we can help you with your efforts to continue your growth. Together, we can do so much more!