Even Korea and Japan may not provide protection from a crisis, as much of their trade passes through the Taiwan Strait, Williams added.
As Kearns puts it, “The prospect of conflict in Taiwan threatens to destroy both regional stability and global economic security.”
This looming threat means that some UK companies are being forced to confront the problem.
Last year BT held a two-day ‘war game’ exercise to stress test its ability to deal with the fallout from a conflict in Taiwan. The exercise, held at the telecom company’s purchasing department in Dublin, involved a scenario in which China sank a ship near Taiwan, the Financial Times reported.
Johan Gott, co-founder of the US political risk consultancy Prism, which helped with the exercise, told the newspaper that participants were shown a series of fictional news flashes, which put pressure on them and forced them to “make decisions under time pressure”. “.
A BT spokesperson said: “Like many businesses, we run regular simulations to stress test our business against a range of scenarios as part of our risk management and planning.”
For many in the chip sector, however, the responsibility for mitigating the risks lies with the government.
Last year, US President Joe Biden unveiled the $280bn (£226bn) Chips and Science Act, aimed at boosting domestic semiconductor production and reducing reliance on Chinese supply chains.
The EU has followed suit, this week approving its own €43bn (£38bn) plan, through which it hopes to double the bloc’s share of global chip production to 20 per cent by 2030.
Yet Britain lags far behind. A long-awaited semiconductor strategy is expected to include an investment of at least £1 billion, but details have yet to materialize.
An announcement was scheduled for this week but has been postponed again, with Politico reporting that the latest delay is due to uncertainty over who will cover technology secretary Michelle Donelan’s maternity leave.
The slowness has sparked anger among British chipmakers, with MPs and British semiconductor executives warning of an exodus to the US if ministers don’t act quickly.
Darren Jones, chairman of the BEIS commission, said last month that any further delay “would be an act of national self-harm.”
Kearns says the strategy was “long overdue”, adding: “Developing sovereign capabilities in this area will be a long-term effort and I hope recent legislation in the US and EU will spur UK lawmakers into action .”
But with a comprehensive strategy yet to be realized, many companies are taking matters into their own hands.
Telecom companies such as Virgin Media O2 have been stockpiling chips, a trend that started amid pandemic-induced supply chain disruptions.
Car manufacturers, who rely on chips for electric vehicles, are also taking action. A spokesman for BMW said the German company is adopting new long-term approaches to secure semiconductor supplies, including direct deals with chip suppliers such as INOVA Semiconductors and GlobalFoundries.