FILE PHOTO: The logo of Taiwan Semiconductor Manufacturing Co is pictured at its headquarters, in Hsinchu, Taiwan, January 19, 2021. REUTERS/Ann Wang/File PhotoTAIPEI: A splintering of global supply chains, driven by both political and business considerations, has hundreds of manufacturers and logistics providers debating where to go next. They’d be well advised to take their cues from two Taiwanese companies who’ve led the charge.
That’s the concern policymakers from Washington to Canberra have in the event tensions between Taipei and Beijing escalate to the point of military conflict.“Instability in the Taiwan Strait is definitely one supply chain resilience consideration,” TSMC Chairman and CEO CC Wei said after its annual shareholder meeting this month.
Two decades after joining the World Trade Organization, China’s position as factory to the world has shifted from being a win-win for clients and suppliers to a massive risk.Japanese and South Korean carmakers are withdrawing, United States power-tool maker Stanley Black & Decker shut its factory and Nike has moved away.
Foxconn, though best known for churning out consumer devices, is a major player in industrial manufacturing and factory automation. As a result, anyone who wants to supply materials or equipment to TSMC will need to have operations near the German city. TSMC’s facility in Arizona is a different story. There’s no business case to be made for setting up there: The region lacks any related industries of note. But pressure from clients, and incentives from US governments at the state and federal level, left the Taiwanese company little choice.