How TSMC and US-China Tensions May Dictate Fate of Global Economy

• The fate of the global economy may rest on the shoulders of one company: TSMC. 
• TSMC is the world’s biggest chipmaker — its chips power everything from cars to iPhones. 
• But US-China tensions, and China’s standoff with Taiwan, could cost the global economy trillions.

On a tiny island off the coast of China, one company manufactures a product used across the globe for countless household products as varied as PCs and washing machines.

And as that island — Taiwan — worries about the threat of a standoff between the US and China, the world’s economy holds its breath. That’s because there could be trillions of dollars’ worth of economic activity tied to that one company: Taiwan Semiconductor Manufacturing Company, the world’s biggest chipmaker.

Industry watchers say an escalating dispute between the US and China over Taiwan could drag down the global economy, given the fact that no other company makes such advanced chips at such a high volume. If TSMC goes offline, they say, the production of everything from cars to iPhones could screech to a halt.

“If China would invade Taiwan, that would be the biggest impact we’ve seen to the global economy — possibly ever,” Glenn O’Donnell, the vice president and research director at Forrester, told Insider. “This could be bigger than 1929.”

What is TSMC?