British companies prepare for war in Taiwan

Williams added that even South Korea and Japan may not be immune to a crisis because most of their trade passes through the Taiwan Strait.

As Kearns puts it: The prospect of conflict over Taiwan could undermine regional stability and global economic security.

This looming danger means some UK businesses are being forced to confront the problem.

Last year, BT held a two-day wargame to test its ability to deal with the fallout from a conflict over Taiwan. According to the Financial Times, the exercise, which took place at the procurement operations of the Dublin-based telecommunications company, involved a scenario in which China sinks a ship near Taiwan.

Johan Gott, co-founder of US political risk consultancy Prism, who assisted in the exercise, told the paper that participants were shown a series of fictional news flashes, put them under pressure and forced They make decisions under time pressure.

A BT spokesman said: “Like many businesses, we regularly run simulations to stress test our business across a range of scenarios as part of our risk management and planning.

For many in the chip industry, however, the onus of mitigating risk lies with governments.

Last year, U.S. President Joe Biden unveiled the $280 billion ($226 billion) Chips and Science Act, aimed at boosting domestic semiconductor production and reducing reliance on Chinese supply chains.

The European Union followed suit, this week approving its own 43 billion ($38 billion) plan to double its share of global chip production to 20 percent by 2030.

However, the UK is far behind. The long-awaited semiconductor strategy is expected to include at least $1 billion in investments, but details have yet to be finalized.

An announcement was planned this week but has been delayed again, with Politico reporting that the latest delay is due to uncertainty over who will be in charge of Technology Minister Michel Donelan’s maternity leave.

The inertia has sparked the ire of British chipmakers, who have been warned by MPs and British semiconductor bosses that they will flee the US if ministers do not act soon.

Darren Jones, chairman of the BEIS committee, said last month that any further delay would be an act of self-harm to the country.

Kearns said the strategy was long overdue, adding: “Developing sovereign capabilities in this area will be a long-term endeavor and I hope that recent legislation in the US and EU will prompt UK lawmakers to act.

But with comprehensive strategies yet to materialize, many businesses are figuring things out on their own.

Telecommunications companies such as Virgin Media O2 have been stockpiling chips, a trend that began during supply chain disruptions caused by the pandemic.

Automakers that rely on chips for electric vehicles are also getting in on the action. A BMW spokesman said the German company was taking a new long-term approach to securing semiconductor supplies, including direct agreements with chip suppliers such as INOVA Semiconductors and GlobalFoundries.