Political spat over vaccines between China and Taiwan could make global computer chip shortage worse

Explainer Worsening Chip Shortage
Posted at 3:18 PM, May 24, 2021

A political spat between China and Taiwan could further threaten the global supply of computer chips amid a shortage that's leading to manufacturing delays.

Taiwan is home to the Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest maker of computer chips and semiconductors. However, the country is currently seeing record high numbers of COVID-19 cases and is struggling to get its hands on vaccines.

According to Bloomberg and Reuters, Taiwan's health minister has accused China of scuttling a deal that the country had to purchase 5 million doses of the Pfizer/BioNTech COVID-19 vaccine directly from BioNTech. Instead, China wanted Taiwan to purchase vaccines from a Chinese company that had exclusive rights to produce the Pfizer vaccine in the country.

China claims Taiwan is playing political games and is putting the lives of its own citizens at risk by holding out.

According to Bloomberg, only about 1% of Taiwan has been vaccinated so far, and its current vaccine supply is dwindling fast.

The dispute is just the latest salvo in the rising tensions between Taiwan and China. Taiwan has been a part of China since 1949, but China has allowed the island to have its own government for decades with the hope of one day formally unifying the island with the mainland.

For months, a global shortage of semiconductors has forced manufacturing delays on everything from electronics to cars. In fact, because the average new automobile requires dozens of computer chips, companies like Ford have been forced to extend downtime at plants.

In some parts of the country, including near Cincinnati, large parking lots are full of newly-completed cars and trucks awaiting computer chips.

In April, GM President Mark Reuss called the computer chip shortage "probably the worst crisis I've seen in the auto industry."

Earlier this month, President Joe Biden called for increased domestic manufacturing of semiconductors so that the U.S. would be less prone to shortages in the future.

"Never again should we be faced with the situation we face today with the semiconductor shortage," Biden said.