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Why it matters: The idea that the US would destroy Taiwan Semiconductor Manufacturing facilities to keep them out of China's hands in the event of an invasion has resurfaced. The very mention of such a drastic measure highlights the volatility of tensions surrounding the three countries, but TSMC thinks its factories could be neutralized much less violently.
Former US National Security Advisor Robert O'Brien told Semafor this week that the US and its allies would destroy TSMC's manufacturing capacity in Taiwan if they failed to prevent China from invading and taking over the self-ruled island. O'Brien warned that letting China take control of the facilities would give it too much power, but TSMC disagrees.
TSMC is easily the world's largest maker of the semiconductors that power most computerized devices today. As such, its fate and the subsequent effects on the global economy are a primary issue of concern regarding tensions between China, Taiwan, and the US. China considers Taiwan a breakaway province that it wishes to reunite with the mainland.
O'Brian said that control over TSMC would turn China into the OPEC of silicon chips, referring to the multistate organization that controls a significant portion of global oil production. O'Brian thinks China would control the world economy if it successfully invaded Taiwan and seized TSMC, and that the US would never let it happen.
The former Trump administration advisor didn't state outright that there was a specific plan to destroy TSMC but admitted he didn't think the company's facilities would survive an invasion. The idea has been floated at least since last year but is far from the US's only option.
The threat to destroy TSMC could be a tactic to dissuade China from invading. Another plan mentioned would be to evacuate TSMC's engineers from Taiwan. Cutting the US off from TSMC's chips would immediately cause a severe recession, and even evacuating the company's personnel could cost the world economy over $1 trillion.
However, all of TSMC's factories aren't in Taiwan - only its most advanced fabs. A Chinese newspaper reacted angrily to the company's plans to build 3nm manufacturing facilities in Arizona, referring to TSMC's home country as "our Taiwan region." The company is also said to be considering building a fab in Dresden, Germany.
Taiwan National Security Bureau director-general Chen Ming-Tong said last year that the US or its allies wouldn't need to destroy TSMC's facilities to keep them out of mainland China's hands. The factories rely on resources from the global economy, like ASML's lithography equipment, and withholding them from a Chinese-controlled TSMC would make the fabs useless. "Even if China got a hold of the golden hen, it won't be able to lay golden eggs," Chen said.