Economically, however, the importance of the island is great. This also applies to Germany.
The diplomatic conflict has been smoldering for decades, but now it is threatening to turn into a war: According to US intelligence services, it is only a matter of time before China invades Taiwan in order to fully integrate the island state into its own country.
Such a war would not only affect the region and the local people. The entire world economy and not least Germany’s companies would be severely affected, as economic experts warn urgently.
“A war in Taiwan would deal a serious blow to the global economy,” says Jürgen Gern, head of economic activity at the Institute for the World Economy, t-online. “It would be like an oil shock.”
Global semiconductor bottlenecks feared
The reason for this sharp verdict is that Taiwan is one of the world’s most important producers of semiconductors. After Intel and Samsung, Taiwan Semiconductors Manufacturing Company (TSMC) is the world’s third largest chip manufacturer.
“If the 14 TSMC factories in the country can no longer produce because of a war, or the semiconductors can no longer be shipped out of the country, companies all over the world will have huge problems,” says Gern. “Germany would also be hit hard, even if it doesn’t look like it at first glance.”
What Gern means by that: On paper, Taiwan’s importance for Germany is comparatively low. According to the latest figures from the Federal Statistical Office, the value of all goods and services that Germany and Taiwan exchanged was 21.5 billion euros. Compared to China, Germany’s most important trading partner, this is just a tenth of the total. Here are around 254.9 billion euros in the statistics.
“TSMC is systemically important”
In the sales ranking of German foreign trade, however, Taiwan still ranks 25th. What is striking here is that Germany imports significantly more from Taiwan than it exports to the Far East country. The value of all exports added up to 9.3 billion euros in 2021. The imports had a total value of 12.2 billion euros.
A large part of this sum is likely to be used to pay for said microchips. According to reports, German car manufacturers such as Audi and Opel are using semiconductors made in Taiwan. However, TSMC is also the largest contract manufacturer in the world. Among other things, the company supplies chips for the iPhone producer Apple and for the computer processor and graphics card manufacturers AMD and Nvidia.
Gern: “TSMC is systemically important. If the production sites fail, this would significantly exacerbate the already large shortage of chips. Then the production lines all over the world stand still.”
Difficult to set up microchip production in Europe
The possible consequences: further supply bottlenecks for electronics and even faster rising prices. According to Gern, a simple and, above all, quick solution is hardly in sight. “The supply chains cannot be turned back that easily,” he says. Even if it were possible to produce more chips in Germany and Europe, it would take time for the microchip cosmos to develop around it:
“The semiconductors are not only manufactured in Taiwan, but also tested and processed further,” says Gern, “and for some preliminary products, Taiwan’s share of the world market is sometimes even higher than for the chips themselves.” Building up this know-how in Europe is a very long-term task – which ultimately requires skilled workers who are already lacking in the economy.
Incidentally, TSMC recently considered building a factory in Europe. Germany was also being discussed for this. However, it is questionable whether this will happen in view of the geopolitical tensions in the Far East.
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