Globalization and free trade is almost dead

Taipei: “In the past 27 years, the semiconductor sector has undergone many major global changes. Currently, the geopolitical situation of the world is changing rapidly. Globalization and free trade are dying. Many think these things will be restored, but there should be a sense that the situation will not return to normal,” warned Morris Chang, founder of TSMC, the world’s leading semiconductor company. Chang’s statement comes against the backdrop of growing competition between the US and China and the trade war.

The trade war launched by former US President Donald Trump against China seems to be intensifying over the past year. The Biden administration in the US has started banning Chinese companies in the technology sector and other key industries and has also decided to impose restrictions on Chinese investments. At the same time, concessions and pressure techniques are being used against the leading companies active in China to start production in the US.

Taiwan Semiconductor Manufacturing Company, the world’s second-largest company in the semiconductor sector, has announced an investment of $40 billion in the United States. With this investment, two large projects will be set up in the US state of Arizona. The production of a 4 nm fab will be taken up in the first project, and the project is scheduled to be commissioned in the year 2024. In the second project, a 3 nm fab will be produced, and the project will be operational in 2026, the company said. At an event to mark the construction of the first of these projects, Chang warned that globalization and the free trade system were coming to an end.

Leading industries in the US and Europe were hit hard by the disruption of global supply chains during the Coronavirus pandemic. Companies in telecom, automobile, information technology and defence had lost billions of dollars. Many companies were forced to stop production. Against this backdrop, the Biden administration in the US had announced billions of dollars in concessions for the semiconductor sector and urged them to start manufacturing in the US.

After this call from the US, many companies in the semiconductor sector have announced new investments in the US, and the investment of TSMC has become the biggest investment among them. TSMC’s investment in the US is also in the background of a possible conflict that may flare up in China-Taiwan. There are constant warnings that China will attack Taiwan in the next few years. This attack could hit the semiconductor sector the hardest. Therefore, along with the United States, European countries have also started making moves to produce semiconductors at home.

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