NANCY PELOSI left Taiwan on August 4 and seems to have left no one indifferent after her visit. After China’s anger and response, it appears that this quick trip caused more collateral damage. It turns out that the sanctions announced by Xi Jinping’s government will affect the technology industry and, consequently, bitcoin.
The arrival of the Speaker of the House of Representatives on the island was taken by the Asian giant as a direct provocation, so the Chinese Communist Party reacted quickly. Indeed, a set of sanctions was drafted in addition to military moves, which were executed when Pelosi left the country.
These included the suspension of certain imports from Taiwan, such as fish, citrus fruits, and natural sand. Although this last raw material might seem somewhat inconsequential, the fact is that it is essential for the technology sector.
“By the relevant regulations, a decision has been made to suspend natural sand exports to Taiwan temporarily. The corresponding measure will take effect on August 3,” said a China’s Ministry of Commerce spokesperson.
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This product is essential because it is used in the manufacture of semiconductors, regarded by many as the “oil of the 21st century“.
Microchips, the “oil of the 21st century”.
“There are currently only three major companies that excel in chip manufacturing; TSMC in Taiwan, Samsung in South Korea, and Intel in the US. But in turn, these manufacturers depend on a Dutch company called ASML, which is the only manufacturer of the most advanced equipment used by these companies,” the YouTube channel Economía y Desarrollo explained.
“Modern microchips are now embedded in everything; from televisions to fighter jets to nuclear weapons. Therefore, semiconductors are the new oil of the 21st century. But the main source of this new oil is not in the Persian Gulf, but in Taiwan; an island claimed by China as part of its territory and at the same time a strategic ally of the United States,” he added.
Taiwan, microchips, and bitcoin
In addition, microchips power many electronic devices, including bitcoin mining equipment (ASICs) and altcoins (video cards). Indeed, TMC is the leading supplier for these devices, which are manufactured in China.
So, if the raw material decreases, the price increase in these devices will not wait.
However, to the delight of the “crypto” community, the island has other trading partners for natural sand. In a press release, Taiwan assured that the sanctions do not have significant relevance because, in the last two years, the import of natural sand was 450,000 and 540,000 metric tons, which represents 0.64% and 0.75% of the domestic demand, respectively.
Joaquín Núñez es hincha de Racing Club de Avellaneda y licenciado en comunicación periodística por la Universidad Católica Argentina. Se especializa en el escenario internacional y en la política norteamericana // Joaquín Núñez is a fan of Avellaneda's Racing Club and has a degree in journalistic communication from the Universidad Católica Argentina. He specializes in the international scene and American politics.