Taiwan could become the next flashpoint in the global tech war

Taiwan could become the next flashpoint in the global tech war

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The world is becoming increasingly dependent on a Taiwanese company for the most advanced semiconductors, after a stumble by rival Intel. But TSMC is trying to pull off a high-wire act by keeping both China and the United States happy at a time of rapidly escalating geopolitical tensions.

There are only three companies that can manufacture super-advanced chipsin the world: Taiwan Semiconductor Manufacturing Company (TSMC), California-based Intel and South Korea’sSamsung. State-of-the-art chipmaking is rare and specialized because it’s incredibly expensive to keep competing at the highest level.

This week, TSMC (TSM) shares soared to new heightsin Taiwan after Intel (INTC) warned it was behind schedule on manufacturing 7 nanometer chips, and may outsource production of them. Advanced chips can store and process more information. A smaller nanometer size means a more advanced chip.

TSMCisthe most likely candidate the US firmcould turn to for help. Samsung (SSNLF) is producing 7 nanometer chips, but its manufacturing business is small relative to TSMC. It also mostly makes memory chips, while Intel needs help manufacturing advanced processing chips.