Semiconductor dispute is a central theme of Taiwan's elections

This Saturday's elections (13 January 2024) in Taiwan are closely watched by the United States and China. The two most global powers have placed the island at the center of a political and economic dispute over the production of semiconductors.

Taiwan produces more than 60% of the world's semiconductors, the majority of which are manufactured by a single company, TSMC (Taiwan Semiconductor Manufacturing Corporation, in English), headquartered in the city of Hsinchu. Furthermore, the production of the most advanced models is carried out almost exclusively in Taiwan.

In 2021, data from Boston Consulting Group indicated that the island accounts for 92% of the manufacturing of semiconductors with components smaller than 10 nanometers, which allow greater processing capacity, while being faster and more energy efficient.

Taiwan's relocation from an agricultural economy to an important global chip export center took place in the second half of the 20th century. Integrating the Asian Tigers, with South Korea, Hong Kong and Singapore, the island modernized its production matrix, initially extractive. , developing industrial and technological sectors.

The professor of International relations at PUC-SP (Pontifical Catholic University of São Paulo) Augusto Rinaldi said in an interview with Power360 that the State played a crucial role as a driver of growth, prioritizing a development model that involved significant investments in strategic sectors such as industrial goods.

“This included support for national industry through subsidies and tariff protection, technology transfer policies, investments in education and research, as well as macroeconomic measures favorable to exports”he declared.

Thus, Taiwan's latent semiconductor industry became known as the “silicon shield” region, as chips manufactured on the island play a strategic role in technological competition and in the electronics product chain for the United States and China.

In 2021, about 44.2% of logic chips imported by the United States were produced in Taiwan. These chips, which play the role of “brain” In electronic devices, they are responsible for processing information to perform various tasks.

The US, through sanctions, “prohibited” Taiwan to export the technology to China. The justification is to prevent the Chinese from obtaining advanced chips that could be used for military purposes, including artificial intelligence applications.

China sees the US restrictions as an affront. The country led by President Xi Jinping considers the island as part of its territory, in the form of a dissident province.

Technological competition for semiconductors between the US and China influences political discussions in this year's presidential elections. This is because the 3 presidential candidates differ in terms of their relationship with Mainland China.

The favorite is Lai Ching-te, 64 years old, member of the DPP (Democratic Progressive Party) and current Taiwanese vice president. He defends the region's autonomy and reinforces the island's need to strengthen relations with the USA. His main rival, Hou Yu-ih, 66, says he will promote interaction between the population of the island and mainland China and has defended a policy of “half term”.

For Leticia Cordeiro, professor at Inest (Institute of Strategic Studies) at UFF (Fluminense Federal University), the expectation is that with a government more favorable to dialogue with China, there will be greater access and priority for the Chinese giant.

“Which would not mean restrictions, at least initially, on North American access to semiconductors, but in the future it could mean even more fierce disputes between the United States and China”explains.

UNDERSTAND THE ELECTIONS IN TAIWAN

Until 1987, the country was under martial law and only in 1996 did it hold its first direct presidential election. The elected president takes office on May 20, with a 4-year term, with re-election permitted.

In addition to acting as commander of the Armed Forces, the president of Taiwan appoints the prime minister, responsible for forming a cabinet, and sanctions legislation.

Polling places opened at 9pm (Brasília time) on Friday (Jan 12) and close at 5am this Saturday (Jan 13). The result should be announced late in the morning.

In all types of elections, Taiwanese use paper ballots, as electronic voting has not yet been implemented in the country. The final result of the election is generally announced on the same day as the election by the Central Electoral Commission.

Whoever gets the majority of votes wins. There is no 2nd round. For Parliament, formally called the Legislative Yuan, each voter has 2 votes: one for their local district's candidate and one for a party.

The Legislative Yuan has 113 seats, with 73 elected by simple majority in specific districts, where voters vote directly for the candidate. Another 34 seats are proportionally distributed between the parties, requiring that an acronym obtain at least 5% of the total votes to win the seats.

The remaining 6 seats are designated to represent the indigenous population of Taiwan. Each legislator has a 4-year term and the inauguration of new members is scheduled for February 1st.

About 19.5 million Taiwanese citizens are eligible to vote. The island's population is more than 23 million. Voters must be 20 years of age or older.

This post was produced by journalism intern Fernanda Fonseca under the supervision of assistant editor Ighor Nóbrega