{"id":27165,"date":"2023-06-25T03:30:58","date_gmt":"2023-06-25T07:30:58","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/taiwans-2024-presidential-election-matters-now-its-about-semiconductors\/"},"modified":"2023-06-25T03:31:00","modified_gmt":"2023-06-25T07:31:00","slug":"taiwans-2024-presidential-election-matters-now-its-about-semiconductors","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=27165","title":{"rendered":"Taiwan’s 2024 Presidential Election Matters Now. It\u2019s About Semiconductors."},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

Taiwan\u2014a central issue in the historically tense U.S.-China relations\u2014is set to hold elections early next year that may be the most unusual the country has ever seen, with direct implications for America\u2019s politics and economy.<\/p>\n

The unexpected insurgence in Taipei last week of a Beijing-friendly third party has shaken decades of Taiwanese politics, which until now has been a two-party system. <\/p>\n

\n

Taiwan, a self-ruled island off the coast of China that Beijing considers a runaway province, is not formally recognized in the international community. But its closest ally is Washington, which for years has provided it with billions of dollars of arms in the event of a China invasion.<\/p>\n

The U.S. has long refrained from saying it would definitely send troops to defend the island in such a case, though President Joe Biden, famous for his off-the-cuff remarks, has repeatedly broken with precedent and said he would send troops, even as the administration stresses its policy toward Taiwan hasn\u2019t changed.<\/p>\n

Dominating Taiwanese politics are relations with China, the U.S., and Taiwan\u2019s globally coveted semiconductor chips, which are at the heart of Washington\u2019s tech war with Beijing.<\/p>\n

U.S. tech restrictions have hurt Beijing\u2019s access to many advanced chips. Yet at the same time, powerful figures within the Biden administration are arguing that restricting Beijing\u2019s access to chips isn\u2019t enough. The U.S. needs its own chip industry to reduce reliance on other countries, particularly one Beijing could potentially take over.<\/p>\n

One Taiwanese firm,
\n Taiwan Semiconductor Manufacturing
\n (ticker: TSM), makes roughly 60% of the world\u2019s semiconductors and nearly all of the most advanced ones. They are arguably the most vital component of many sophisticated military, supercomputer, and communications devices. Their role in AI is becoming indispensable.<\/p>\n

The U.S. can somewhat restrict Taiwan Semi sales to China partially because of the strong U.S. relations with Taiwan\u2019s Democratic Progressive Party, or DPP, and because the firm uses a small amount of American components. But Taiwan Semi has sought to avoid the restrictions by producing chips in Arizona, where it has a small operation it is seeking to expand.<\/p>\n

Regardless, the restrictions have adversely affected U.S. chipmakers such as
\n Nvidia
\n (NVDA), which gets significant revenue from China. But recently passed legislation to support American chipmakers seeks to offset that damage. China has sought retribution by banning purchases of memory chips from U.S. firm
\n Micron Technology
\n (MU).<\/p>\n

Taiwan\u2019s importance in Sino-American relations was on full display last week when U.S. Secretary of State Antony Blinken visited Beijing and met with Chinese President Xi Jinping. He covered a range of issues, including expressing displeasure with China\u2019s recent aggressive military maneuvers around Taiwan and violation of its airspace.<\/p>\n

But he repeatedly reminded the top Chinese leadership that the U.S. doesn\u2019t support Taiwan independence. Though Blinken was expressing a decades-long U.S. policy, it drew backlash among Republicans, even though that party officially opposes Taiwan independence as well.<\/p>\n

\u201cXi Jinping has a nose for U.S. weakness,\u201d John W. Garver, emeritus professor at Georgia Tech and a specialist on U.S.-China relations told Barron\u2019s<\/em>. He cited China\u2019s bigger and more modern navy than that of the U.S., crumbled alliances under former President Donald Trump, and the revival of isolationism in the Republican party as a sliver of China\u2019s seizing of an empire in decline.<\/p>\n

Campaigning is well underway for Taiwan\u2019s presidential and legislative elections in January. Recent polls put the DPP a few points ahead of the Beijing-friendly Kuomintang, or KMT. But last week something happened that was previously unseen in Taiwan\u2019s two-party system. A third party has seized momentum as the DPP and KMT deal with scandals. The once-obscure Taiwan People\u2019s Party, or TPP, is currently ahead of the KMT by roughly two percentage points, within the margin of error of the incumbent DPP.<\/p>\n

Rory Green, chief China economist at Lombard Green wrote in a note to clients that \u201cwhile it is too early to call the election result,\u201d a DPP win is likely to \u201cincrease cross-strait tensions\u201d while a victory for KMT or TPP \u201cwould slow the pace of U.S. Taiwan engagement.\u201d <\/p>\n

As the TPP is also considered far more accommodating to Beijing than the DPP, there are now two parties polling well who would likely reduce tensions with Beijing, and be more likely to lessen chip sales. That could have a range of implications\u2014politically, militarily, and economically.<\/p>\n

\u201cIf the TPP or KMT wins in 2024, the U.S. chip ban will fail. And China will enhance its influence over Taiwan,\u201d said Austin Wang, a professor of political science at the University of Nevada, Las Vegas, and an expert on U.S.-Taiwan-China relations.<\/p>\n

\u201cU.S. high-tech companies who still invest in China may benefit from it temporarily, but it is likely that China will develop its own products in the long run,\u201d he told Barron\u2019s<\/em>.<\/p>\n

Write to editors@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Taiwan\u2014a central issue in the historically tense U.S.-China relations\u2014is set to hold elections early next year that may be the most unusual the country has ever seen, with direct implications for America\u2019s politics and economy. The unexpected insurgence in Taipei last week of a Beijing-friendly third party has shaken decades of Taiwanese politics, which until […]<\/p>\n","protected":false},"author":1,"featured_media":27166,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-27165","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nTaiwan's 2024 Presidential Election Matters Now. 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