wry sense of seen-it-all-before in the crucible of the world’s semiconductor industry. When your columnist took the bullet train to Hsinchu Science Park, home to Taiwan Semiconductor Manufacturing Company , the world’s biggest chip producer, on May 24th, China was simulating a military encirclement of Taiwan in waters not far over the horizon. An invasion would be cataclysmic. A blockade could starve the island of vital energy resources. Even cyber-attacks could be crippling.
Semiconductor executives to whom Schumpeter spoke on a tour of Taiwan, South Korea and Japan are not nearly as relaxed about America’s economic manoeuvres against China, though. They say sanctions, subsidies, tariffs and other blunt instruments of geopolitical rivalry and industrial policy may have strategic logic. But they jeopardise one of the miracles of modern technology: the fragile semiconductor supply chain that stretches from East Asia to America and Europe, with Taiwan at its crux.
This article appeared in the Business section of the print edition under the headline “The invisible hand meets the clenched fist”
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