US House speaker visits Taiwan as global chip supply fears increase amid China tensions

Nancy Pelosi met with TSMC chairman Mark Liu, who recently told CNBC that ‘no one can control TSMC by force’

The speaker of the US House of Representatives, Nancy Pelosi, met with the chairman of the world's biggest chipmaker on a recent visit to Taiwan.

Pelosi met with Mark Liu, chairman of TSMC, as focus on the importance of Taiwan to the global chip supply chain increases amid tensions between the self-governing island and China.

China's foreign minister Wang Yi labelled the visit as "manic, irresponsible and irrational", with China subsequently reacting by launching a number of military exercises off the coast of Taiwan.

It comes as fears of what a Chinese presence in the region could mean for the global chip supply chain, with Taiwan playing a crucial role in the production of semiconductors.

China believes the self-ruling island is part of its territory and wants it to be unified with the mainland.

Chip shortages have hit vendors and their distributor and reseller partners hard since the start of the COVID-19 pandemic, contributing to extended wait times and difficulty obtaining certain hardware.

But in an interview with CNBC earlier this week, Liu attempted to alleviate fears of what the use of Chinese force could mean for the semiconductor giant.

"Nobody can control TSMC by force," Liu said.

"If you take a military force or invasion, you will render TSMC factory non-operable, because it is such a sophisticated manufacturing facility.

"From materials to chemicals to spare parts to engineering software diagnoses, it takes everybody's effort to make this factory operable. So if you take it over by force, you can no longer make it operable."

According to Taiwanese media, Pelosi and Liu discussed the global chip industry and the United States' CHIPS act.

President Joe Biden is set to sign the act, which will pump $52bn worth of benefits into the semiconductor injury, into law in the hope it will boost US production and lessen the reliance on Asia for chips.