Former Trump official says if China invades Taiwan, the U.S. will destroy TSMC's fabs
As crazy as it sounds, the U.S. would physically destroy TSMC and its fabrication facilities if China invades Taiwan just to keep the foundry out of China's hands. This comes from Robert O'Brien, former National Security Advisor for the Trump administration. TSMC is the world's largest foundry and Apple is its largest customer making up 25% of its revenue.
While O'Brien didn't actually say that the U.S. would blow up TSMC's facilities, he more than hinted at it in a response to a comment made by a reporter for Semafor.
When asked by the reporter if TSMC's chip production facilities would really be destroyed in the wake of a Chinese invasion of Taiwan, O'Brien said, "I can’t imagine they’d be intact." There could be some plan in place to prevent China from taking control of TSMC should China act to invade Taiwan. Officials in Taiwan believe that even if China were to take control of TSMC in an invasion, it would not be able to operate the facilities.
Taiwan believes that in the event of an invasion, the Chinese would not know how to operate TSMC's fabs
The Chinese covet TSMC's chip-making operations
Chen Ming-tong, director-general of Taiwan’s National Security Bureau, said last October, "Even if China got a hold of the golden hen, it won’t be able to lay golden eggs." One of the concerns that the U.S. has is that under China's control, TSMC would produce advanced chips for the Chinese military to use on aircraft and other war-related machines. China has longed to become self-sufficient when it comes to chip production which makes TSMC an inviting target and a reason for the country to invade Taiwan.
But there are products needed to produce cutting-edge chips such as Dutch firm ASML's lithography machines. These are used to etch circuitry patterns on wafers that are thinner than the width of human hair. This machine is extremely important in the manufacturing of advanced chips and ASML has been banned from shipping them to China. So a Chinese-run TSMC could be handicapped right off the bat.
Ambassador O'Brien says, "The United States and its allies are never going to let those factories fall into Chinese hands." He goes on to say that if China were to take control of TSMC's operations, it would "control the world economy." O'Brien compares this to the destruction of France's naval fleet by Britain after France surrendered to Nazi Germany. 1,100 sailors were killed in the attack.
It is possible that the U.S. is hoping that mere talk about such a plan would be enough to dissuade China from invading Taiwan. But that might be naive thinking. Should the U.S. lose access to TSMC, it could lead to a global recession or perhaps even a depression.
TSMC and Samsung are both shipping 3nm chips with Apple locking up all of TSMC's 3nm production for this year. Next year, TSMC's U.S. fab in Phoenix Arizona is expected to start producing 4nm chips (which are really an enhanced 5nm node). A second factory in the states will be built and is expected to spit out 3nm chips by 2026. By then, however, TSMC's Taiwan-based fabs will be producing chips using a 2nm process node.
TSMC reportedly has enjoyed an 80% yield rate for its 3nm chip production all of which is heading to Apple
Intel expects to take process leadership over TSMC and Samsung in 2025 but we will have to see how this plays out. Besides producing Apple's chips including its A-series and M-series silicon, TSMC manufactures the Snapdragon 8 Gen 2 and the Snapdragon 8 Gen 2 for Galaxy Application Processors. Other major customers include AMD, Nvidia, MediaTek, and even Intel.
Reportedly TSMC has been producing 3nm chips for Apple with an impressive 80% yield rate. That means that 8 out of every 10 chips made by the foundry pass quality control. This is important because each wafer that 3nm chips are built on costs $20,000.
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