WASHINGTON -
Heightened hostility across the Taiwan Strait
could result in an extended disruption to the
world's microchip supply chain, especially as
Taiwan is set to become the world's leading
manufacturer of dynamic random access memory
(DRAM) chips in 2007, the US-Taiwan Business
Council said on Wednesday.
Council
president Rupert Hammond-Chambers said the recent
destruction of a satellite by a Chinese
ground-based ballistic missile renewed concerns
over China's military intentions and its
"peaceful" rise in Asia. "It also drew the world's
attention to
potential flashpoints,
including Taiwan and the possibility that China
would resort to using force to reunify with the
island," he said.
The missile test took
place just before the release of the council's
"Semiconductor Report - Annual Review 2006", which
anticipates that Taiwan will become the world's
leading manufacturer of DRAM chips in 2007,
Hammond-Chambers noted.
He quoted the
report in highlighting Taiwan's strategic
importance in the chip industry. Taiwan is home to
the world's highest concentration of advanced
12-inch semiconductor fabrication plants.
He also quoted data from Taiwan's
Institute for Information Industry indicating that
Taiwan is not only the leading producer of
important semiconductor technologies such as DRAM,
but Taiwanese companies are also responsible for a
significant share of global technology production,
including about 82% of notebook computers, 98% of
motherboards, and 72% of liquid-crystal-display
(LCD) monitors.
US companies sourced an
estimated US$73.3 billion of technology products
from Taiwan in 2006 alone, an 11% increase over
2005, he said.
Hammond-Chambers said the
global economy is increasingly reliant on the
supply-chain synergies that run through Taiwan and
its regional partners. "These partnerships produce
many of the technological products on which we
have become reliant, and which improve business
productivity and empower consumers.
"Present trends point toward Taiwan
strengthening its position in certain key sectors,
particularly in semiconductors," he added.
Hammond-Chambers said the council is
concerned about the potential costs to the United
States if that critical supply chain is severed by
"acts of God" such as an earthquake like that
which struck in 1999, or if provocative actions
undertaken by Beijing result in an extended
supply-chain disruption.
Semiconductors
are critical not only to commercial businesses but
also to modern warfare, he said, adding that a
reliable and robust supply base is a crucial
component of any country's modern military. This
is true in particular for the United States, as it
relies on a single semiconductor manufacturer to
provide it with all of the chips it requires for
national security, and where additional supplies
of chips must come from commercial sources, he
said.
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