2023-04-16 15:13:30
The escalation of tensions between China and Taiwan worries not only the governments of the countries, but also the global technology sector. Taiwan is the main supplier of modern microchips. Therefore, a military conflict can paralyze the entire IT industry.
British telecommunications company BT (formerly British Telecom) held “war games” shortly after then-Speaker of the US House of Representatives Nancy Pelosi flew to Taiwan last August. According to the Financial Times, the company’s management tried to understand, using computer simulations, how it would have to act in the event of a military conflict between China and Taiwan.
The arrival of the American delegation to the island, which China considers its territory, has led to a serious aggravation of relations between Beijing and Washington. In response, China immediately began large-scale military exercises around the island. Since then, the situation has only escalated, and in early April of this year, the People’s Liberation Army of China conducted exercises that already implied a complete blockade of Taiwan.
Technology companies are extremely concerned about the situation around the island. After all, Taiwan produces about 90% of the most advanced microchips and about 60% of the more common ones.
At the same time, TSMC is their key supplier for global manufacturers of all kinds of equipment. And any military conflict around the island, no matter how it ends, will mean a stop in the supply of microchips from it.
At the same time, according to research company Rhodium Group, the conflict in Taiwan “will put more than $ 2 trillion in economic activity at risk, even without taking into account the consequences of international sanctions or a military response.”
Johan Gott, co-founder of Prism, a consulting firm that helped BT assess the impact of military conflict on the company’s supply chain, told the FT that governments and defense ministries often order similar simulations. Recently, however, corporations have increasingly begun to resort to such checks.
BT itself noted that such simulations are an integral part of the business. “Like many companies, we regularly run simulations to test our business across a range of scenarios as part of our risk management and planning,” the company said.
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