Taiwan requires a commercial agreement before opening electronics chip factories in Europe.

On Monday, Taiwan stated that it won’t open any electronic chip factories in Europe until a trade agreement is signed with Brussels.

TSMC, Taiwan’s semiconductor manufacturing company and the world’s largest chip manufacturer, is under pressure to diversify the geographical distribution of its advanced chip industry. The company is working with governments in Europe, the United States, and Japan to develop a more widespread global footprint. Policymakers and global customers are expressing concern. As their reliance on technology increases, Beijing’s threat to invade an island forced TSMC to move some of its production overseas.

In recent years, the world has realized that semiconductor materials have become essential for modern economies, much like oil. In fact, some have even dubbed them the “new oil.”

The global competition for semiconductor supplies, particularly between the United States and China, is intensifying to maintain their economic and technological dominance.