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Thats interesting. My initial thoughts on this came the from the opposite side in terms of Taiwans security. One of the major bounties for invading Taiwan wou

Thats interesting. My initial thoughts on this came the from the opposite side in terms of Taiwans security. One of the major bounties for invading Taiwan would be in the acquisition and control of their chip manufacturing. Which - as you mention, the entire tech world is dependant on. By moving some of that capability offshore, that incentive is gone. Though I can see it from both sides.

boringg 4y ago
I thought the same thing. I believe it is more nuanced than that. PRC wants Taiwan regardless of its production value (geopolitical & PRC narrative) though I'm sure they would like the control of chip manufacturing. However if the US did move all of its strategic production off island there would be less value accrued to defending outside that said keeping a close presence on China expansion is important to the US. So it would still have value maybe a bit less so. Please excuse the human aspect of the population as we are separating that part of the discussion.
abakker 4y ago
Without the staff from TSMC, the Chinese Government probably can't run those facilities. I suspect there isn't much probability that china could mobilize and take those facilities as-is with no sabotage. The US has taken steps recently to reduce china's ability to make chips domestically. See - https://www.seattletimes.com/business/chip-gear-maker-asml-asks-u-s-staff-to-refrain-from-china-customers/ https://www.seattletimes.com/business/chip-gear-maker-asml-a...
- nradov 4y ago
  The Chinese government also wouldn't be able to run those fabs without ongoing support from ASML and other key foreign vendors. The production machinery is extremely complex with many specialized parts and a significant software component. Reverse engineering and duplicating everything would take years.
  - phatfish 4y ago
    It seems like there are a few key parts that could be removed that would make those ASML machines utterly useless even if Chinese engineers spent time reverse engineering the rest. Surely there is no need to remove or destroy the whole thing as is suggested in other comments. The equivalent of popping out the Intel/AMD/ARM CPU to disable a computer, and leaving the motherboard, RAM etc.
- mzs 4y ago
  ATM PRC assaulting Taiwan would hobble western defense industry. By moving more manufacturing into NA & EU that alleviates it. It helps Taiwan as well who depends on western defense industry.
- FBISurveillance 4y ago
  I've read that TSMC fabs are filled with explosives to set off if China invades so they wouldn't get their hands on tech and equipment. I'm pretty certain that's true, given how important TSMC tech is.
  - dirtyid 4y ago
    That meme makes zero sense considering TW don't want to be a third world economy dependant on exporting fruit even if PRC successfully invades. There's reason TW media was telling US think tanks to leave TSMC alone when US Army War College analysis suggested US should consider bombing TSMC... or exfiltrate TSMC engineers (before children no less) in event of war. As long as fabs and downstream supply chain supplies said fabs are intact, the island will have leverage to remain viable modern economy to support relatively affluent lifestyle. Note the point on downstream supply chain, there's sufficiently exclusive niche semi industries sustaining TSMC on TW that makes it as critical as ASML. Don't expect any Arizona TSMC fabs to operate smoothly without them. If anything, expect TSMC and TW + PRC to collude to threaten TSMC US fabs if try to sanction TSMC TW from making chips in event of successful PRC takeover. The people whose making bank off TSMC will want to so regardless of who rules the island. Ultimately short/medium term also in US interest to keep fabs going because not enough fab capacity will be reshored off island for long time, and the interest groups hurt most is US high tech industry who extracts disproportionate value add from TW fabs. Imaging every company that depends on leading edge chips turning into Huawei/ZTE because 95% of production goes kaput. Currently, cratered TSMC fabs actually works in sanctioned PRC's favour because it dramatically closes relative gap of who has access to high end semi. PRC vastly better off in balance where everyone is mostly stuck on 28nm+ instead of one where US has unfettered access to leading edge.
    - t-3 4y ago
      > exfiltrate TSMC engineers (before children no less) Why would you expect the US military to care about children or try to evacuate them?
      - dirtyid 4y ago
- filoleg 4y ago
  The Chinese government doesn't run those facilities now, and I agree that they won't be able to do so in the event of a Taiwan invasion either. That's not the point though. Who runs those facilities now? TSMC aka Taiwan aka a western ally. Who stands to lose the most from TSMC facilities being burned to the ground? Taiwan (obviously) and the west. As a layman with no background in international relations, to me it seems like TSMC is simply an extra bargaining chip for the Chinese government. Which is why I am all about the idea of building more TSMC facilities in places that are less susceptible to being invaded. And yes, the Arizona plant is just a drop in the bucket compared to their facilities in Taiwan, but you gotta start somewhere, and something is better than nothing in this case imo.
ecshafer 4y ago
China absolutely wants to be reunited with Taiwan. Taiwan is a constant reminder of the century of humiliation (Translated term that is basically China's term for Opium wars to WWII). Taiwan is an integral part of the Chinese nation and for nationalistic reasons, it would be an issue even if Taiwan had no other benefits.
- zasdffaa 4y ago
  Speaking as a brit, the opium wars were an abomination but China does like to (or find convenient) playing the victim.
- SkyMarshal 4y ago
  > Taiwan is an integral part of the Chinese nation No it isn't. China under the Communist Party has never ruled or controlled Taiwan (since 1949). Taiwan democratized, developed, and got wealthy first, completely independently of China. Taiwan has never in modern history been an integral part of China.
  - gnu8 4y ago
    China has been a country for longer than the history of European civilization. They do not subscribe to the view that nothing that happened before 1945 matters the way Americans seem to.
    - philliphaydon 4y ago
      China also makes the claim of 1000s of years of history but Taiwans inclusion in that history is about 200 years. And of that less than 10 was a province that China still didn’t govern or control. It was more or less just something they said to deter Japan. So historically China has never ruled over Taiwan. Japan has more claim to Taiwan than China as it actually ruled and controlled Taiwan.
      - rendang 4y ago
        Not if you're a nationalist, since most of Taiwan is ethnically Han, not Japanese.
andrecarini 4y ago
> By moving some of that capability offshore, that incentive is gone. I'm not sure if that incentive was significant enough. In my eyes, PRC's interest in Taiwan is at best orthogonal with TSMC's manufacturing capabilities.
pjc50 4y ago
Everyone is aware that this would be scorched earth, right? If the fabs somehow survive the initial wave of strategic bombing both the US and Taiwan have an interest in preventing them from falling into enemy hands. In addition, the US will then place China under a trade embargo. And that's assuming that the US doesn't actively engage PRC forces. To say this would make the world worse off is a drastic understatement.
- yellow_lead 4y ago
  Exactly. And the TSMC chair said it best: TSMC would be rendered "not operable," TSMC Chair Mark Liu said.
SkyMarshal 4y ago
> By moving some of that capability offshore, that incentive is gone. China's main motivation isn't about controlling TSMC, that's just a useful side-objective if it comes to pass. Their main motivations are: 1) break the first island chain barrier and gain a naval base with unhindered access to the Pacific, and 2) shut down a high-functioning Chinese democracy that is a constant reminder to the people of mainland China that democracy works for Chinese people and that they don't actually need the CCP. These are also the reasons the US and Taiwan's other allies like Japan will continue to defend the country even if it moves some chip production to safer locales.
- filoleg 4y ago
  Perhaps it isn't about controlling TSMC, but control of TSMC would be a very strong leverage over the west. Not that it is the only or even the most powerful leverage China has over the west, but it is still a massive one, and it has quite a lot of second-order effects.
  - coredog64 4y ago
    China wants to focus more of their economy on internal demand. Something like TSMC, which would allow them to fab CPUs and own more of the value chain in things like laptops and cellphones would help them reach that goal.
    - WastingMyTime89 4y ago
      Hardly, TSMC is dependent on outside suppliers in Europe and the USA which would not supply China.
  - SkyMarshal 4y ago
    > but control of TSMC would be a very strong leverage over the west. They'll never control TSMC by invading Taiwan. TSMC will sabotage their equipment if it looks like a CCP invasion is about to succeed. CCP knows that, it's not their main reason for wanting Taiwan.
ip26 4y ago
More bleakly, if TSMC is destroyed as a result of invasion, the rest of the world is denied access. This might be to their liking. With some of the capability in the US, they can no longer deny the rest of the world.

boringg 4y ago

I thought the same thing. I believe it is more nuanced than that. PRC wants Taiwan regardless of its production value (geopolitical & PRC narrative) though I'm sure they would like the control of chip manufacturing. However if the US did move all of its strategic production off island there would be less value accrued to defending outside that said keeping a close presence on China expansion is important to the US. So it would still have value maybe a bit less so. Please excuse the human aspect of the population as we are separating that part of the discussion.

abakker 4y ago

Without the staff from TSMC, the Chinese Government probably can't run those facilities. I suspect there isn't much probability that china could mobilize and take those facilities as-is with no sabotage. The US has taken steps recently to reduce china's ability to make chips domestically. See - https://www.seattletimes.com/business/chip-gear-maker-asml-asks-u-s-staff-to-refrain-from-china-customers/ https://www.seattletimes.com/business/chip-gear-maker-asml-a...

nradov 4y ago
The Chinese government also wouldn't be able to run those fabs without ongoing support from ASML and other key foreign vendors. The production machinery is extremely complex with many specialized parts and a significant software component. Reverse engineering and duplicating everything would take years.
- phatfish 4y ago
  It seems like there are a few key parts that could be removed that would make those ASML machines utterly useless even if Chinese engineers spent time reverse engineering the rest. Surely there is no need to remove or destroy the whole thing as is suggested in other comments. The equivalent of popping out the Intel/AMD/ARM CPU to disable a computer, and leaving the motherboard, RAM etc.
mzs 4y ago
ATM PRC assaulting Taiwan would hobble western defense industry. By moving more manufacturing into NA & EU that alleviates it. It helps Taiwan as well who depends on western defense industry.
FBISurveillance 4y ago
I've read that TSMC fabs are filled with explosives to set off if China invades so they wouldn't get their hands on tech and equipment. I'm pretty certain that's true, given how important TSMC tech is.
- dirtyid 4y ago
  That meme makes zero sense considering TW don't want to be a third world economy dependant on exporting fruit even if PRC successfully invades. There's reason TW media was telling US think tanks to leave TSMC alone when US Army War College analysis suggested US should consider bombing TSMC... or exfiltrate TSMC engineers (before children no less) in event of war. As long as fabs and downstream supply chain supplies said fabs are intact, the island will have leverage to remain viable modern economy to support relatively affluent lifestyle. Note the point on downstream supply chain, there's sufficiently exclusive niche semi industries sustaining TSMC on TW that makes it as critical as ASML. Don't expect any Arizona TSMC fabs to operate smoothly without them. If anything, expect TSMC and TW + PRC to collude to threaten TSMC US fabs if try to sanction TSMC TW from making chips in event of successful PRC takeover. The people whose making bank off TSMC will want to so regardless of who rules the island. Ultimately short/medium term also in US interest to keep fabs going because not enough fab capacity will be reshored off island for long time, and the interest groups hurt most is US high tech industry who extracts disproportionate value add from TW fabs. Imaging every company that depends on leading edge chips turning into Huawei/ZTE because 95% of production goes kaput. Currently, cratered TSMC fabs actually works in sanctioned PRC's favour because it dramatically closes relative gap of who has access to high end semi. PRC vastly better off in balance where everyone is mostly stuck on 28nm+ instead of one where US has unfettered access to leading edge.
  - t-3 4y ago
    > exfiltrate TSMC engineers (before children no less) Why would you expect the US military to care about children or try to evacuate them?
    - dirtyid 4y ago
filoleg 4y ago
The Chinese government doesn't run those facilities now, and I agree that they won't be able to do so in the event of a Taiwan invasion either. That's not the point though. Who runs those facilities now? TSMC aka Taiwan aka a western ally. Who stands to lose the most from TSMC facilities being burned to the ground? Taiwan (obviously) and the west. As a layman with no background in international relations, to me it seems like TSMC is simply an extra bargaining chip for the Chinese government. Which is why I am all about the idea of building more TSMC facilities in places that are less susceptible to being invaded. And yes, the Arizona plant is just a drop in the bucket compared to their facilities in Taiwan, but you gotta start somewhere, and something is better than nothing in this case imo.

ecshafer 4y ago

China absolutely wants to be reunited with Taiwan. Taiwan is a constant reminder of the century of humiliation (Translated term that is basically China's term for Opium wars to WWII). Taiwan is an integral part of the Chinese nation and for nationalistic reasons, it would be an issue even if Taiwan had no other benefits.

zasdffaa 4y ago
Speaking as a brit, the opium wars were an abomination but China does like to (or find convenient) playing the victim.
SkyMarshal 4y ago
> Taiwan is an integral part of the Chinese nation No it isn't. China under the Communist Party has never ruled or controlled Taiwan (since 1949). Taiwan democratized, developed, and got wealthy first, completely independently of China. Taiwan has never in modern history been an integral part of China.
- gnu8 4y ago
  China has been a country for longer than the history of European civilization. They do not subscribe to the view that nothing that happened before 1945 matters the way Americans seem to.
  - philliphaydon 4y ago
    China also makes the claim of 1000s of years of history but Taiwans inclusion in that history is about 200 years. And of that less than 10 was a province that China still didn’t govern or control. It was more or less just something they said to deter Japan. So historically China has never ruled over Taiwan. Japan has more claim to Taiwan than China as it actually ruled and controlled Taiwan.
    - rendang 4y ago
      Not if you're a nationalist, since most of Taiwan is ethnically Han, not Japanese.

andrecarini 4y ago

> By moving some of that capability offshore, that incentive is gone. I'm not sure if that incentive was significant enough. In my eyes, PRC's interest in Taiwan is at best orthogonal with TSMC's manufacturing capabilities.

pjc50 4y ago

Everyone is aware that this would be scorched earth, right? If the fabs somehow survive the initial wave of strategic bombing both the US and Taiwan have an interest in preventing them from falling into enemy hands. In addition, the US will then place China under a trade embargo. And that's assuming that the US doesn't actively engage PRC forces. To say this would make the world worse off is a drastic understatement.

yellow_lead 4y ago
Exactly. And the TSMC chair said it best: TSMC would be rendered "not operable," TSMC Chair Mark Liu said.

SkyMarshal 4y ago

> By moving some of that capability offshore, that incentive is gone. China's main motivation isn't about controlling TSMC, that's just a useful side-objective if it comes to pass. Their main motivations are: 1) break the first island chain barrier and gain a naval base with unhindered access to the Pacific, and 2) shut down a high-functioning Chinese democracy that is a constant reminder to the people of mainland China that democracy works for Chinese people and that they don't actually need the CCP. These are also the reasons the US and Taiwan's other allies like Japan will continue to defend the country even if it moves some chip production to safer locales.

filoleg 4y ago
Perhaps it isn't about controlling TSMC, but control of TSMC would be a very strong leverage over the west. Not that it is the only or even the most powerful leverage China has over the west, but it is still a massive one, and it has quite a lot of second-order effects.
- coredog64 4y ago
  China wants to focus more of their economy on internal demand. Something like TSMC, which would allow them to fab CPUs and own more of the value chain in things like laptops and cellphones would help them reach that goal.
  - WastingMyTime89 4y ago
    Hardly, TSMC is dependent on outside suppliers in Europe and the USA which would not supply China.
- SkyMarshal 4y ago
  > but control of TSMC would be a very strong leverage over the west. They'll never control TSMC by invading Taiwan. TSMC will sabotage their equipment if it looks like a CCP invasion is about to succeed. CCP knows that, it's not their main reason for wanting Taiwan.

ip26 4y ago

More bleakly, if TSMC is destroyed as a result of invasion, the rest of the world is denied access. This might be to their liking. With some of the capability in the US, they can no longer deny the rest of the world.