Pelosi’s Taiwan trip puts the world's biggest chipmaker back in the spotlight of U.S.-China rivalry - CNBC

House Speaker Nancy Pelosi may have left Taiwan but the visit has cast a spotlight once again on the island's critical role in the global chip supply chain and in particular on the world's biggest chipmaker, Taiwan Semiconductor Manufacturing Co., or TSMC.

"The obvious reason being its crucial strategic importance as a chip manufacturer and in the global semiconductor supply chain.".

can't do it alone and will require collaboration with Asian companies that dominate the most cutting-edge chips.

fell behind in chip manufacturing over the last 15 years or so, companies like TSMC and Samsung Electronics in South Korea, pushed ahead with cutting-edge chipmaking techniques.

TSMC accounts for 54% of the global foundry market, according to Counterpoint Research.

Taiwan as a country accounts for about two-thirds of the global foundry market alone when considering TSMC alongside other players like UMC and Vanguard.

There is a concern that any kind of invasion of Taiwan by China could massively affect the power structure of the global chip market, giving Beijing control of technology it had not previously had.

On top of that, there is a fear that an invasion could choke off the supply of cutting-edge chips to the rest of the world.

"Most likely, the Chinese would 'nationalize it,' (TSMC) and begin integrating the company, and its technology, into its own semiconductor industry," Abishur Prakash, co-founder of advisory firm the Center for Innovating the Future, told CNBC via email.

House of Representatives passed the Chips and Science Act which includes $52 billion in funding designed to boost semiconductor manufacturing in the U.S.

SMIC is crucial to China's ambitions, but sanctions have cut it off from the key tools it requires to make the most cutting-edge chips as TSMC does.

TSMC does have two chipmaking plants in China but they are producing less sophisticated semiconductors unlike the manufacturing facility in Arizona.

The question is, as tensions between Taiwan and China increase, will TSMC be able to maintain its position (aligning with the West), or will it be forced to recalibrate its geopolitical strategy."