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Morgan Stanley's report highlights a looming 11-day LNG cliff for Taiwan, which threatens the stability of its semiconductor production reliant on LNG imports. The closure of the Strait of Hormuz risks a prolonged disruption to energy supplies necessary for chip manufacturing.

Taiwan Semiconductor Manufacturing, responsible for 90% of advanced chips, consumes a significant portion of Taiwan's electricity. In addition, a potential sulfur shortage due to blocked oil refining activities could hinder the extraction of key metals used in chip components. This situation could lead to rising costs and a decline in consumer demand for tech products, impacting the overall tech sector amidst inflationary pressures.