WACO, Texas (FOX 44) — Tensions between Taiwan and China are continuing to rise, which leaves many in the United States wondering about the production of microchips.
Taiwan is the ninth largest trading partner to the United States and according to Texas A&M – Central Texas Economic Professor Dr. Robert Tennant, a war could severely impact the product we would see here in the U.S.
“It’s a significant influence on our overall economy and the merchandise that they provide us,” he said.
Ninety percent of the most sophisticated microchips are produced in Taiwan.
Tennant referenced the supply chain shortage the U.S. felt during the COVID-19 pandemic and how it would feel if Taiwan and China went to war.
“We were not able to pivot and immediately replace the missing chips,” he told FOX 44 News. “If a war broke out in time, we would be able to, but it would not be instantaneously. It would create new supply chain issues. They would only be able to be resolved when either the war ended or we were able to overcome the limitations in the marketplace.”
The Biden administration has announced an arms sale to Taiwan of over a billion dollars.
AP News reports that:
“The state department said the equipment is necessary for Taiwan to maintain a sufficient self-defense capability.”
Tennant did touch on the passing of the chips act in July by federal leaders but said that if a war breaks out in the near future, it would not be able to sustain the amount of chips used in daily life.
“It is a multi-industry situation and problem because we do use these chips in everything that has any kind of computing power. There are so many aspects of our lives that rely on these sophisticated chips nowadays.”
Tennant ended by explaining that this is not something for people to worry about just yet, as many are still fighting inflation prices and cannot afford to buy multiples of expensive items that may have the chips needed.