Beijing's typhoon traffic order in the Taiwan Strait adds to supply chain risk for Apple, which relies on TSMC's Taiwanese fabs to build nearly all iPhone and Mac processors.
Taiwan's government called Beijing's traffic control attempt in the Taiwan Strait "ridiculous," rejecting any claim that China can restrict international waters access during the approaching typhoon.
The order, issued by Chinese maritime authorities, demanded that vessels follow designated routes and report positions. Taiwan's transportation ministry said ships should ignore such broadcasts and report them to Taipei. The Coast Guard has not detected abnormal Chinese vessel movements in the area, a spokesperson said.
Most of the world's advanced chip manufacturing capacity sits on Taiwan's west coast, within 100 miles of the strait. Apple relies on TSMC for nearly all its A-series and M-series processors, making the waterway a chokepoint for iPhone and Mac production. Any disruption to shipping lanes, even for a few days, would ripple through Apple's inventory pipeline. The company carries roughly four to six weeks of component stock, analysts at Morgan Stanley estimated in a recent note.
The typhoon season typically forces temporary rerouting, not a freeze. China's demand that ships submit to its routing system during a storm is unusual. It follows Beijing's 2022 military exercises around Taiwan, which disrupted air and sea traffic for several days. That episode cost shipping lines an estimated $200 million in delays, the Taipei-based Chinese Maritime Transport Association said at the time.
Apple shares closed down 1.1% on Tuesday, slightly worse than the Nasdaq's 0.6% drop. The move came after reports of the traffic order crossed trading desks in the afternoon. Tradeweb data showed elevated bid-ask spreads on Taiwan-listed chip stocks.
The Coast Guard said it has not needed to escort any commercial vessels through the area. It continues to monitor the situation.
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