Rising geopolitical tension, high inflation and a cyclical downturn in chip demand have triggered “some panic” in the chip industry, the chief of China’s largest semiconductor maker has warned, in comments that follow a week of Chinese military exercises near Taiwan.

The overlap of factors that include the threat of “regional conflict overseas” had “brought some panic to the industry and led to an extreme quick freeze reaction in some parts of the supply chain” with customers abruptly cancelling orders, Zhao Haijun, Semiconductor Manufacturing International Corporation’s chief executive, said on Friday.

Although Zhao did not mention Taiwan directly, the statement marks the first time a mainland Chinese semiconductor boss has publicly hinted at the impact of rising tension in the region.