The continuing escalation of the Ukraine crisis with Russia has the world on a knife-edge, but could this be the spark that ignites a new crisis situation between China and Taiwan?

Why is Taiwan a significant problem for the world's semiconductor supply?

Semiconductors are developed and manufactured across the globe, but Taiwan is by far the leader in semiconductor fabrication. In fact, Taiwan's semiconductor capabilities are so advanced that Intel had to contract out TSMC to manufacture some of their products after multiple failed attempts by Intel to break the 7nm barrier.

And yet, despite Taiwan's incredible semiconductor capabilities, it poses a major threat to the entire western world. The relationship between Taiwan and the west has never been stronger. Democracy forms a foundation for the country, and the economy is growing, but a sizeable red elephant sitting in the corner of the room continues to grow; China.

China does not recognise Taiwanese independence and sees Taiwan as a rouge Chinese region as historically, the island of Taiwan was a part of mainland China. The rise of Mao saw the Chinese Nationalist Party retreat to Taiwan after intense fighting. While the Chinese National Party set roots on the island and claimed independence (as true China), mainland China never handed over sovereignty of the land.

The relationship between China and Taiwan has always been somewhat rocky, but the introduction of capitalism in China over several decades saw this relationship improve. But, the current ruler of China, Xi Jinping, has taken an ultra-authoritarian approach to China using social monitoring, installation of loyal communist party members in most companies, and heavy amounts of censorship. Among these moves, the retaking of Taiwan is high on the agenda as its very existence is a threat to the Chinese Communist Party.

Thus, the capture of Taiwan by China would put every semiconductor manufacturer in Taiwan at risk, which would significantly affect global semiconductor supplies. Furthermore, China would have direct access to the latest semiconductor manufacturing technologies, giving it an advantage over every other nation in both the commercial sphere and defence.

How does the Ukraine crisis put Taiwan at increased risk?

Ukraine has been a stable democracy since its founding after the collapse of the Soviet Union, but those living near the border with Russia will often identify as being Russian (due to the close proximity of Russia and the fact that Ukraine used to be Russia). Many who lived under Soviet rule still feel a sense of pride and attachment, and younger generations may even see the time of the USSR as a period of Russian strength.

Since 2014, Ukraine has seen widening political discourse and instability between pro-Russian and pro-Ukrainian activists. The Russian Federation's annexation of Crimea resulted from pro-Russian separatists seizing control of the Crimea region who then wanted to absorb Crimea as a federal subject to Russia. Fast forward to today, and several regions on the border of Ukraine are now seeing Russian troops moving in to secure Russian interests. So, how does the Ukraine crises affect Taiwan and semiconductors in general?

Simply put, the whole world is looking towards NATO for a response, and if NATO shows any signs of weakness or lack of will to respond, then it could signal to China that an invasion of Taiwan would also not be met with retaliation from NATO. The only reason China currently doesn't invade Taiwan is that the US has a treaty with Taiwan in that any attack from China would see US involvement.

But if NATO (the US being a founding member) does not respond to Russia, it may also give China a free pass to take Taiwan. Thus, what happens in Ukraine over the next month could also seal the fate of Taiwan and the semiconductor industry.

What can engineers do to future protect their designs and businesses?

As supply chains become increasingly complex, preparing for conflicts between countries can be complicated. In the case of semiconductors, many governments worldwide are now pushing for semiconductor sovereignty, whereby countries can manufacture their own cutting-edge semiconductor devices.

But for engineers working with consumer products, not much can be done when considering that China is one of the world's largest electronics components manufacturers, and Russia is a major supplier of oil and gas. Of course, it is always vital that engineers keep up to date with the political situation of countries where parts come from, and it is always a good idea to keep a list of alternative parts whose origin is in a different country.