ISSUE 164                                                                                October 20, 2022
Taiwan Weekly
Reliable report and analysis of the most important issues in Taiwan
In This Issue
● Featured Editorial:
● Featured Editorial: 
● This Week in Taiwan: 
Other Important Events This Week

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TSMC Becomes Spotlight in U.S.-China Chip War
In order to contain China's development, the United States has issued three consecutive waves of semiconductor bans. According to media commentary, this will affect not only the Taiwan Semiconductor Manufacturing Company (TSMC) but also severely impact Taiwan's economy.
(Photo from: The Storm Media)
Featured Editorial

U.S. Would Rather Destroy TSMC?

China Times Editorial, October 13, 2022


The Taiwan Semiconductor Manufacturing Company (TSMC) was once the favorite of the United States, and it won numerous kinds of preferential treatments to set up factories in the United States. Today, in order to compete with China, the United States is determined to completely destroy the development of advanced semiconductor technology in mainland China, and has gradually become suspicious of TSMC. The latest ban, issued a few days ago, set three conditions, that all chips using American technology must be approved before they can be sold to the mainland; related technologies are prohibited from flowing into the mainland; and Americans (including Chinese with American passports) are prohibited from working for the mainland semiconductor industry. The first two conditions would make a heavy blow to TSMC's operations and profits, and even two American companies, NVIDIA and AMD, which have a Taiwanese background and work closely with TSMC, have been implicated. According to Financial Times, the harsh sanctions are intended to hit China so that it regresses to the Stone Age.

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Featured Editorial
According to media commentary, Elon Musk's concerns about the situation in the Taiwan Strait may trigger a "Musk phenomenon" in the American business community and politics. Taiwan should respond carefully.
(Photo from: United Daily News)

Musk's Proposal Raises Concerns about Abandoning Taiwan

Want Daily Editorial, October 15, 2022


In an exclusive interview with Financial Times, Elon Musk, founder of Tesla and SpaceX, expressed his concern over the escalating tension across the Taiwan Strait. According to Musk, if there were a conflict across the strait, Tesla would be involved, Apple could not isolate itself from it; total global economy would suffer a 30-percent loss. He suggested that "a special administration zone" with more autonomy than Hong Kong be established in Taiwan to maintain cross-strait peace. His claim is in tone with the “One Country, Two Systems” formula proposed by Beijing, whereas both sides of the strait have different reactions. Tesla’s suggestion can’t represent all American enterprises but his concern over war has its universality. This war concern exactly accounts for the long-term claim of “ditching Taiwan” in the United States.

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Featured Editorial
According to media commentary, President Tsai Ing-wen has taken a perfunctory attitude towards Lee Yuan-tseh, former president of the Academia Sinica and a major contributor to the Democratic Progressive Party's (DPP) successful governance, let alone concerns of the general public.
(Photo from: United Daily News)

Nobel Laureate Criticizes DPP's Corruption

United Daily News Editorial, October 14, 2022


In an interview, Lee Yuan-tseh, former president of the Academia Sinica, stated that he had approached President Tsai Ing-wen to discuss the issue of greenhouse gas emissions. However, President Tsai brushed off the matter by saying, “It is none of my business after 2024”, tossing the problem to the future. Lee criticized that since the Democratic Progressive Party (DPP) came to power, it has corrupted faster than in the past. Its primary concern is the election and its interests, forgetting the ideal to serve people. Lee supported Chen Shui-bian in the 2000s and endorsed Tsai in 2016, and both of them successfully took the presidential office. Today Lee publicly condemns the DPP’s degeneration and corruption. Is he trying to ease his conscience or offer his repentance? Or perhaps neither?

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This Week in Taiwan
At the opening of the 20th National Congress of the Chinse Communist Party, Xi Jinping stated that resolving the Taiwan issue is the Chinese people's own business. China will do its best to strive for peaceful reunification but will never commit to abandoning the use of military force.
(Photo from: The Storm Media)
October 9: The United States Department of Commerce announced on October 7 chip export control measures to contain the development of China's semiconductors. The Ministry of Economic Affairs stated on October 9 that the United States is primarily targeting supercomputers and data centers, with little impact on Taiwan because Chinese manufacturers do not place these kinds of orders with Taiwan businesses. In addition, the Taiwan Semiconductor Manufacturing Company (TSMC) confirmed that it has received a one-year exemption and stated that the new U.S. ban on China is mainly targets ultra-high-end chips related to artificial intelligence and supercomputers and has limited impact on TSMC operations. 
October 10: In her National Day address, President Tsai Ing-wen emphasized that confrontation is by no means an option for either side of the Taiwan Strait. Under rationality, equality, and mutual respect, she is willing to work with the authorities in Beijing to find a mutually acceptable way to maintain peace and stability in the Taiwan Strait. 
October 11: The Taipei stock exchange suffered a collapse by nearly 600 points, and the New Taiwan dollar also depreciated by nearly $0.2. against the U.S. dollar. The Securities and Futures Bureau, Financial Supervisory Commission, took action to save the market. Starting from October 12, the daily intraday securities borrowing and selling limit was reduced from 20 percent to 10 percent, and the minimum margin for securities lending was raised from 100 percent to 120 percent. 
October 11: Minister of National Defense Chiu Kuo-cheng redefined what is meant by "first strike." In the past, the first strike was defined as missiles and artillery shells. Now, mainland Chinese aircraft, including drones, enter Taiwan's airspace, will also be regarded as a first strike. In his interpellation, Legislator Johnny Chiang asked how the military will deal with a first strike. Chiu confirmed that as soon as the opponent makes a first strike, the military will counter-attack, potentially triggering war, making the situation very serious.
October 12: The White House released the Biden administration's national security strategy, reiterating its support for Taiwan's self-defense and maintaining the ability of the United States to resist any resort to force or coercion against Taiwan. The United States ranks China as its foremost competitor and is the only rival that the United States faces in the world. Overcoming China is the utmost priority. 
October 13: Border restrictions were lifted after 939 days due to the coronavirus (COVID-19). The Central Epidemic Command Center (CECC) lowered the global travel advisory to level 2 "Alert" from the level 3 "Warning" since March 21, 2020.
On the first day of the new "0+7" quarantine system, a total of about 20 tour groups and 244 group tourists came to Taiwan for sightseeing. 
October 14: In the annual final accounts review, the National Audit Office listed five major deficiencies in the procurement of Medigen vaccines. Among them, Medigen vaccines were overdue for more than 30 days for many times, and the Ministry of Health and Welfare did not add liquidated damages according to contract. Minister of Health and Welfare Hsueh Jui-yuan explained that liquidated damages were not added due to administrative omission, but subsequent penalties have been increased. 
October 16: The 20th National Congress of the Chinese Communist Party debuted. In his political report at the opening ceremony, General Secretary XI Jinping indicated that the resolution of the Taiwan issue is the Chinese people's own business, and it must be decided by the Chinese people. According to Xi, China adheres to the prospect of peaceful reunification with the utmost sincerity and best efforts, but it will never commit to renounce the use of military force and reserve the option of taking all necessary measures. The Office of the President responded that the Republic of China (Taiwan) is a sovereign and independent state, and the people of Taiwan believe in and are committed to freedom and democracy. The mainstream public opinion in Taiwan also clearly rejects "One Country, Two Systems."
Taiwan Weekly is a newsletter released every week by Fair Winds Foundation and Association of Foreign Relations which provides coverage and perspectives on the latest developments in Taiwan.

The conclusions and recommendations of any Taiwan Weekly article are solely those of its author(s) and do not reflect the views of the institutions that publish the newsletter.

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