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In context: Once again, rising tensions between China and the US have put the spotlight on Taiwan and what would happen to TSMC, which manufactures more than half the world's semiconductors, in the event of an invasion. One proposal is to destroy the company's facilities, but the island's security chief said such a move is unnecessary.
Chen Ming-tong, director-general of Taiwan's National Security Bureau, told lawmakers (via Bloomberg) that TSMC's reliance on overseas companies and supplies for its operations means the facilities would be useless if China took over Taiwan.
"If you understand the ecosystem of TSMC, the comments out there are unrealistic," Chen said. "TSMC needs to integrate global elements before producing high-end chips. Without components or equipment like ASML's lithography equipment, without any key components, there is no way TSMC can continue its production."
The Biden administration is reportedly making more contingency plans for a hypothetical invasion of Taiwan by China and the potential impact on the world's chip supply. In July, Commerce Secretary Gina Raimondo warned that the US would face a "deep and immediate recession" if it were ever cut off from the Taiwanese chip manufacturing industry.
The US is said to be considering the evacuation of TSMC chip engineers in the event of a Chinese invasion, something the US National Security Council estimates would impact the world economy by more than $1 trillion. Former US officials have suggested making it clear to China that the semiconductor giant's facilities would be destroyed by the US if the attack occurred, thereby prevented TSMC from falling into Chinese hands.
When asked about the prospect of China taking over TSMC, Chen said, "Those war-gaming plans are just scenarios […] If they understood TSMC's ecosystem better, they would realize that it's not as simple as they think. That's why Intel can't catch up with TSMC."
"Even if China got a hold of the golden hen, it won't be able to lay golden eggs," he added.
This isn't the first time the prospect of TSMC being taken over by China has been addressed. Chairman Mark Liu said in August that the company's sophisticated manufacturing facilities depended on a real-time connection with the outside world, making TSMC useless in China's hands.
June brought news of a top Chinese economist urging China to seize TSMC if the US tightened sanctions, something it has done in the months since then; they include prohibiting Nvidia and AMD from selling high-end accelerators to Chinese customers. The restrictions, which the White House says are in place to prevent China from producing military systems including weapons of mass destruction, contributed to the Chinese semiconductor industry's largest-ever production decline in August.