why does it matter: The idea that the United States would destroy Taiwanese semiconductor manufacturing facilities to keep them out of Chinese hands in the event of an invasion has resurfaced. The mention of such a drastic measure highlights the volatile tensions surrounding the three countries, but TSMC believes its factories could be neutralized less violently.
Former US National Security Adviser Robert O’Brien Tell Semafor this week that the US and its allies will destroy TSMC’s manufacturing capacity in Taiwan if they fail to stop China from invading and taking over the self-ruled island. Allowing China to control the facilities would give it too much power, O’Brien warned, but TSMC disagrees.
TSMC is easily the world’s largest maker of the semiconductors that power most of today’s computing devices. As such, its fate and subsequent effects on the global economy is a major issue of concern regarding tensions between China, Taiwan, and the United States. China considers Taiwan a breakaway province that it would like to reunite with the mainland.
Taking control of TSMC would turn China into an OPEC for silicon wafers, O’Brian said, referring to the multinational organization that controls much of the world’s oil production. O’Brian believed that China would dominate the world economy if it succeeded in invading Taiwan and taking over TSMC, and that the United States would never allow that to happen.
The former Trump administration adviser did not explicitly mention that there was a specific plan to destroy TSMC but admitted that he did not believe the company’s facilities would survive the invasion. The idea has been floated at least since last year but it is far from the only option for the US.
Threatening to destroy TSMC could be a tactic to dissuade China from invading. Another plan mentioned is the evacuation of TSMC engineers from Taiwan. Cutting the US off TSMC chips would instantly lead to a severe recession, and even evacuating the company’s employees could cost the global economy more than $1 trillion.
However, not all of TSMC’s factories are in Taiwan – only its most advanced ones. A Chinese newspaper reacted angrily to the company’s plans to build 3nm manufacturing facilities in Arizona, Referring to TSMC’s home as “our own Taiwan.” The company is said to be as well Taking into account the Fab Building in Dresden, Germany.
Director General of Taiwan’s National Security Bureau, Chen Ming-tung He said Last year, neither the United States nor its allies would have needed to destroy TSMC’s facilities to keep it out of mainland China’s hands. The factories depend on resources from the global economy, such as ASML’s lithography equipment, and withholding them from the Chinese-controlled TSMC would render the military industries useless. “Even if China gets the golden chicken, it won’t be able to lay the golden eggs,” Chen said.