Taiwan Official Explains With Extreme Calm Why the U.S. Doesn’t Need to Blow Up TSMC if China Invades

Taiwan Official Explains With Extreme Calm Why the U.S. Doesn’t Need to Blow Up TSMC if China Invades

Taiwan Semiconductor Manufacturing Company is, by many estimates, the most important chipmaker in the world, both monetarily and for the worldwide tech supply chain. If the global economy suddenly lost access to TSMC’s chipmaking expertise, it could spell massive impacts to most countries that are still working to get over the hump of post-pandemic era supply chain disruptions.

U.S. policymakers have put China and chips in the same category, a basket likely labelled “deny at all costs.” The administration of President Joe Biden has tried to put roadblocks in the way of U.S. companies making deals with China-based firms, but it’s reportedly even more severe than that. A recent Bloomberg report showed that the U.S. was drafting up contingency plans that could include evacuating Taiwan’s chip engineers and even considered hypotheticals of putting troops on the ground.

But one aspect of all the war games is the few war wonks who have advocated that the U.S. threaten to destroy TSMC facilities if China were to move in. A paper published in the Army War College Quarterly last year mentioned a “scorched-earth strategy that would render Taiwan not just unattractive… but positively costly to maintain.” Bloomberg cites one former Pentagon official who also advocated for Biden to come up with a plan to bomb TSMC.

Of course, those are just a few voices in a very crowded and loud room, but the old children’s sandbox rules of “if I can’t have it, then nobody can” have attracted enough attention that Taiwan’s military officials apparently made a response.

While speaking to Taiwan’s parliament on Wednesday, the country’s National Security Bureau Director-General Chen Ming-tong reportedly said “even if China got a hold of the golden hen, it won’t be able to lay golden eggs.”

What Chen is getting at is TSMC relies on global suppliers for its parts, and that in the event that China invades, global sanctions and trade restrictions would do enough to gum up the works. Or more specifically, ”without components or equipment like [ASML Holding, a Netherlands-based electronic supplier company] lithography equipment… there is no way TSMC can continue its production.”

More than that, the country’s defence minister Chiu Kuo-cheng reportedly said “there is no such plot” for the U.S. to start dropping bombs on TSMC factories if the country were invaded.

Chen further tried to tamp down on fears the U.S. is going to sap Taiwan’s top chipmaking minds from the country, calling those wargaming plans “just scenarios” while adding “If they understood TSMC’s ecosystem better, they would realise that it’s not as simple as they think. That’s why Intel can’t catch up with TSMC.”

TSMC is a major supplier of some of the biggest big tech powerhouses like Apple, and it’s often outpaced U.S.-based companies like Intel, a company which has also relied on the Taiwanese chipmaker for production. The U.S. has tried to fight against the possibility of China’s tech dominance with its recent $US52 ($72) billion CHIPS+ bill meant to stimulate growth in the hometown electronics industry, though we could be many years out from feeling any actual impacts of new production facilities. The U.S., in the meantime, has restricted chipmakers and other electronics toolmakers from selling certain tech like AI training chips to China.

There has been more military posturing from China since House Speaker Nancy Pelosi took a diplomatic trip to Taiwan back in August. At the same time, TSMC is working to create a $US12 ($17) billion chip plant in Arizona.

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