Supply chain decoupling from Russia, China will lead to disruptive innovations: Taiwan analyst

台灣分析師：供應鏈與俄羅斯、中國脫鉤將引發顛覆性創新

ITRI's Ray Yang observes world suppliers speeding up transition, innovation to cut reliance on materials from latest conflict zone


TAIPEI (Taiwan News) — As the international sanctions against Russia expand, a senior market analyst said the West's economic decoupling from Russia, and possible action against China due to its pro-Kremlin lean, will shape a new technological landscape.

The world's supply chains will continue to shift away from China and become more resilient in the long term, said Ray Yang, consulting director (楊瑞臨) of the Hsinchu-based Industrial Technology Research Institute (ITRI).

Yang recalled that Russia's annexation of Crimea in 2014 set off alarm bells for traders of the most-used semiconductor materials and chemicals, which resulted in them beginning to source the materials elsewhere. However, they still rely on certain raw materials from Russia and Ukraine.

The conflict today is serving as a catalyst for a faster shift, Yang observed. World suppliers are speeding up transition and innovation to cut reliance on the materials from the latest conflict zone, such as by seeking new mine grounds or developing new manufacturing skills.

"That Switzerland relinquished its neutrality during the war indicates that countries and business leaders will soon find it difficult to remain ambiguous and be forced to choose a side," he said. "The impact of the Ukraine-Russia war will be far-reaching in terms of world supply chains."

Yang anticipated that two camps would surface: one to be known as a "free world" led by the United States and the other by China, which is facing more pressure from the decoupling. A supply chain shock is inevitable in the short term, but in the long run more disruptive innovations and resilience can be expected.

Prior to Russia's invasion of Ukraine in February, Yang commented on the geopolitical tension, saying the impact on Taiwan's major semiconductor companies is relatively limited compared to its rivals.