TAIPEI (Taiwan News) — "Chip War" author Chris Miller on Wednesday (Nov. 1) said that the global economy would suffer trillions of dollars in losses within two quarters if China launches a blockade around Taiwan.
While speaking at the Hindustan Times Leadership Summit, Miller told Hindustan Times editor-in-chief R Sukumar that a war between China and Taiwan could result in the loss of trillions of dollars across the globe. This is because Taiwan is a major player in the vitally important semiconductor industry, he said.
Although countries are seeking to onshore their semiconductor production, Miller said it would be decades before any one country would be able to fully independently produce cutting-edge chips. Therefore, they should first focus on specific risks instead, he said.
Miller pointed out that the greatest challenge is that the entire world is "hugely reliant" on Taiwan and China for their production of advanced semiconductors.
Sukumar said that while Taiwan is currently a critical cog in global semiconductor production, it is "such a fraught place geopolitically." Sukumar then asked Miller to give his assessment of the future direction of Taiwan's role in the world's chip supply chain.
Miller responded, "I think the challenge right now is that it's very difficult to confidently predict where the politics will go and where Chinese policies vis-a-vis Taiwan will end up." Due to this uncertainty, Miller said that companies and countries are reevaluating the dependence of their supply chains on China and Taiwan and are finding it "very difficult to completely insure themselves against China-Taiwan risks but they have to because the costs are vast."
"The best estimates of the cost, in case China were to blockade Taiwan or otherwise disrupt semiconductor shipments is that just in the first couple of quarters there will be trillions of dollars of damage done to the global economy and so it's a challenge that neither governments nor companies can afford to ignore even though it's a very difficult problem to solve," said Miller.