/ world today news/ The “Pearl of Taiwan” is called the Taiwanese semiconductor manufacturing company – TSMC (Taiwan Semiconductor Manufacturing Company).
The company was founded in 1987 by the government of the Republic of China (Taiwan) and private investors. During its 35 years of existence, TSMC has made dizzying growth in the global semiconductor and microcircuit (chip) market. It accounts for more than half of the global chip market.
And if we take only the latest generation chips (with indicators measured by several tens of nanometers), then the company’s share exceeds 90%. In the second half of this year, the company will start producing microchips with an indicator of 3 nanometers. In the US and China, the microelectronics industry expects to reach a similar level only in the second half of this decade.
The number of TSMC employees at the end of 2020 reached about 57 thousand people. TSMC is in the top ten most valuable companies in the world along with five of its customers. These are the American corporations Apple, Google, NVIDIA, Tesla, Amazon; they all design their own chips and manufacture them at TSMC.
A large part of the products of these and other American companies that use the services of TSMC are created by order of the Pentagon. Without exaggeration, we can say that TSMC serves the military-industrial complex (MIC) of the United States and to some extent is part of it.
For Washington, the gap between purely American and Taiwanese microchips is not narrowing, but growing. There are almost no companies left in the US that do not use Taiwanese outsourcing (submitting orders to TSMC). The last company to hold back was Intel. In 2020, it independently manufactures 80 percent of the microchips it sells.
However, in early 2021, Intel CEO Pat Gelsinger made an important announcement: “As part of our 2023 roadmap, we will leverage our relationship with TSMC to provide customers with […]additional advanced processor products. That’s the power of our new IDM 2.0 model, combined with a modular approach to design and industry-leading Intel packaging technologies.
China is even more dependent on Taiwanese microchips. And Washington is using Taiwan as a microchip supplier as a tool to exert pressure on mainland China. In 2020, Washington pressured Taipei to stop supplying microchips to the Chinese corporation Huawei.
And in April 2021, Washington, through Taipei, forced TSMC to stop cooperation with the Chinese Tianjin Phytium Information Technology (Phytium), which the American authorities put on the blacklist of Chinese companies (Huawei also appeared there). These companies were blacklisted because they allegedly built supercomputers for the Chinese military and helped the PRC develop weapons of mass destruction (WMD).
One can imagine Beijing’s reaction. On the one hand, Beijing has stepped up efforts to return the island to a unified China. On the other hand, it took additional measures for import substitution in microelectronics. The second direction must necessarily be supplemented by the first.
If earlier Beijing proclaimed the task of annexing Taiwan as a territory and population, now the task is set more broadly. The island is needed together with its “pearl” – TSMC. Then Beijing will become the undisputed leader in microelectronics, and therefore also in the economy and in the military sphere.
The thinking of the Chinese leaders was well understood in Washington. And they began to help Taiwan strengthen its defense capability. In October 2020, Washington approved a $1.8 billion arms shipment to Taiwan.
Late last year, Joe Biden signed the National Defense Authorization Act (NDAA), which allocated $770 billion for defense needs through 2022. Of this, $7.1 billion is earmarked to support the defense of Taiwan and the Pacific Initiative (containment of China in Asia).
In April of this year, Republican Senator Joshua Hawley called for the acceleration of arms shipments to Taiwan. Among the types of weapons to be supplied to Taiwan, the senator listed sea mines, anti-tank missiles and man-portable air defense systems.
Experts say that China has long had a plan to “soft” annexation of Taiwan with minimal use of weapons. Beijing wants to ensure that the annexation of the island does not lead to the possible physical destruction of TSMC’s manufacturing facilities.
However, the likelihood that the annexation would be “soft” began to diminish due to US arms deliveries to the island. If the fire of the war in Ukraine dies down, Washington will be able to turn its full attention to Taiwan. Information leaked to the media that Beijing will try to annex the island in the fall.
Different scenarios are emerging for the consequences of China’s military operation in Taiwan. This includes scenarios where TSMC’s manufacturing facilities will be severely damaged. In this case, the company’s work will be suspended. And it’s not the most dramatic scenario. Complete targeted destruction of TSMC facilities is not excluded.
At the end of last year, the American military magazine “Parameters” published an article called Broken Nest: Reterring China from Invading Taiwan. Its authors are American military experts Jared M. McKinney and Peter Harris. This is essentially a report of a study done at the US Army War College in Carlisle, Pennsylvania.
The report said the destruction of semiconductor factories makes Taiwan unattractive to China. Hence the insane proposal: destroy Taiwan’s chip factories. This will ensure that China does not encroach on the island. We read:
“To begin with, the United States and Taiwan should develop a plan for a targeted scorched-earth strategy that will make Taiwan not only unattractive if ever taken by force, but positively expensive to maintain. This can be done most effectively through threat to destroy the facilities owned by Taiwan Semiconductor Company, the world’s most important chip maker and the most important supplier to China.Samsung, based in South Korea (a US ally), is the only alternative to this modern design.
Despite China’s massive efforts to create a “Made in China” chip industry, in 2020 only 6 percent of the semiconductors used in China were domestically produced. If Taiwan Semiconductor Company’s facilities stop working, it will be difficult for companies around the world to continue their operations. Such a development would mean that China’s high-tech industries would be brought to a halt just as the country would be embroiled in a full-scale war. Even when the official war is over, the economic costs will remain for years to come.”
The authors of the article admit that, of course, the destruction of TSMC’s production facilities will have serious consequences for the United States, but not fatal ones. They estimate the dependence of the American economy on the products of the Taiwanese company as high, but in China it is even higher.
Destroying TSMC would be a “shot in the leg” for America, but it could be a shot in the head for China. China doesn’t seem suicidal, so it won’t risk provoking America (or its Taiwanese agents) to press the button on an explosive device. The authors of the article propose to develop an “automatic mechanism” of destruction, which will work after fixing the signs of intrusion: “Done properly, such a strategy could thwart a Chinese invasion of Taiwan while reducing the chance of unwanted conflict between the great powers.”
This plan, let’s face it, is adventurous to the point of insanity. The probability of a mess on the island is very high. And if it starts, it won’t necessarily end with the destruction of TSMC’s manufacturing facilities. The publication in Parameters magazine inspired a number of experts and journalists to draw several more scenarios for the conflict in Taiwan. For example, after the destruction of TSMC, Washington imposed a freeze on China’s foreign exchange reserves. If Russia had about $300 billion in reserves frozen at the end of February, which significantly shook the US dollar, then blocking China’s reserves of over $3 trillion will simply destroy the US dollar.
P.S. Reading the article from the magazine “Parameters”, I remembered A.N. Ostrovsky’s play “The Dowry”. In its finale, the main character Larisa Dmitrievna declares to her fiance Karandishev that she will not marry him and leaves for Paris with a rich merchant. Karandishev shoots Larisa with the words: “So no one will get you!” The authors of the article in an American military magazine call on Washington to repeat Karandishev’s spectacular act.
Translation: ES
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