In a Cross-Strait Scenario, Taiwan’s Semiconductors are Irrelevant

In a Cross-Strait Scenario, Taiwan’s Semiconductors are Irrelevant

Semiconductor manufacturing is on everyone’s mind—except Beijing’s.


In recent months, the flagship Taiwanese tech firm, the Taiwan Semiconductor Manufacturing Company (TSMC), has been a focus of discussions about a potential Chinese invasion of Taiwan. For instance, Nikkei published a piece by Jared M. McKinney, a professor at the U.S. Air Force War College. McKinney argues that Taiwan should destroy TSMC’s world-leading chip foundries to prevent them from falling into PRC hands.

After China gets its hands on the advanced extreme ultraviolet lithography (EUV) machines, McKinney contends, it could then proceed to develop its own alternative chip-making capacity; “Once it got through short-term disruptions, China could emerge as a semiconductor superpower that is essentially self-reliant.” It follows that threatening to destroy the machines would help deter an invasion, and “It is in Taiwan's interest to make clear that China will not gain access to TSMC's EUV machines and semiconductor foundries if it invades.”


However, the truth is simple: TSMC is irrelevant.

Long before TSMC emerged as a semiconductor colossus, Chinese leaders claimed Taiwan as a sovereign territory of the People’s Republic. The claim exists irrespective of Taiwan’s economic prowess. Although McKinney does not argue the TSMC drives the PRC’s annexation dreams, other commentators like Marc Kennis have argued this explicitly. If TSMC disappeared tomorrow, Beijing would go right on pretending Taiwan has always been part of China.

Prior to 1942, as Alan Wachman observed in Why Taiwan? Geostrategic Rationales for China’s Territorial Integrity both the Nationalist (KMT) and Communist (CCP) leaderships were indifferent to Taiwan during the interwar period. Comments from elites, youth publications, and government intelligence reports treated Taiwan as lying outside China’s traditional domain and assumed that the island’s inhabitants would one day form an independent state.

After Japan brought the US into World War II, Chinese elites began considering what territories would be up for grabs following the conflict. The KMT government under Generalissimo Chiang Kai-Shek started to rewrite the history of China to include Taiwan, and the Communists followed suit when they took power in 1949. With a zeal whose strength is as great as its historical foundation is false, the Party leadership has internalized the doctored history behind unification as a key strategic objective. In 2000, long before TSMC had become a household name and the darling of would-be George Kennans on the internet, then Chinese Premier Zhu Rongji snarled on the eve of Taiwan’s presidential election: “no matter who comes to power in Taiwan, Taiwan will never be allowed to be independent.”

TSMC is thus irrelevant to the PRC’s desire to annex Taiwan. It is just as unrelated to Chinese objectives following a hypothetical war and occupation.

First, the advanced lithography machines at TSMC will quickly become useless in the event of war. Should they go offline for even a few days, they will accumulate dust and other contaminants and require extensive cleaning. But any war in the Straits will likely go on for weeks. Once the machines go offline, as electricity, labor, and water systems collapse, they will quickly become useless. Dormant machines will require disassembly, refurbishing, or reconstruction. I have heard from experts that it is unclear whether TSMC staff could do that without foreign inputs, even in peacetime. The war itself will destroy them without Taiwanese sabotage.

TSMC is dependent on supply chains that stretch across national boundaries. Numerous Japanese firms, such as Resonac, which supplies a compound used to polish the silicon wafers, and Shin-Etsu Chemical, help keep the assembly lines rolling. This flow of material imports would dry up instantly in the event of invasion.

The same would go for the hundreds of smaller firms that populate the upstream and downstream of TSMC’s logistics stream. The skilled workers may be conscripted into the army or flee the island. An exodus of essential foreign technicians and migrant laborers is also on the cards. How many will return to work under the PRC’s authoritarian rule?

If the PLA captures TSMC, its technological advantages will quickly fade as new chip manufacturers emerge elsewhere to meet global demand. China, for years, has been cut off from cutting-edge chip-making technology, and its own attempts to forge a world-beating chip industry have foundered on its strict information controls. Not by coincidence, the world’s leading chip firms have emerged in societies where skilled labor and information circulate freely. Hence, when TSMC becomes Chinese, it will fall out of the mainstream of global chip production.

Moreover, practical issues abound. McKinney and others imagine a world where events will quickly return to normal once the war ends. That is not our world. In recent years Taiwan has suffered from chronic drought. In response, TSMC has acquired a fleet of trucks to supply it with over 150,000 tons of water daily. Though generally ignored in invasion hypotheticals, Taiwan's creaky water system is vulnerable to missile attacks or sabotage on dams, pipes, and reservoirs.

Not only is the water supply to TSMC likely to fail and not be easily restored, but its fleet of trucks will be critical war equipment subject to requisition by the government. “In war,” a local city planner once told me, “there will be no private property.” Nor is China, learning from Ukraine, going to leave Taiwan’s electricity systems in operation. The PLA’s artillery, drones, and missiles would target prime movers of every kind, along with buses, public transport systems, trains, roads, bridges, and tunnels (where Taiwan will likely stash its mobile weapons systems). In occupied Taiwan, transportation infrastructure will be scarred for years.

Beijing is well aware of all this. The truth is that TSMC is leverage, but only for China. As long as Taiwan’s fabs are intact and functioning, the PRC gains from threatening to destroy them (“surrender, or we’ll devastate your economy!”), while Taiwan gains nothing from destroying them. Beijing will simply shrug. Indeed, that their destruction might demoralize Taiwan’s population and hurt its export economy is a good reason Beijing might just go ahead and destroy them. The symbolic meaning of Taiwan’s tech industry as the basis of its free existence makes the island’s chip factories targets as tempting as the former mosques in Xinjiang.

Recall that Beijing does not merely want to annex Taiwan: it wants to annihilate the whole idea of an independent, democratic, high-functioning, free Taiwan. Its democracy is a daily refutation of the CCP’s claim that only the party can rule the people it deems “Chinese.” Behavior ranging from the occupation of Hong Kong to the CCP’s strict controls on Chinese firms—and mandatory party appointees in foreign ones—all show that economic gains are less important to the Party than political dominance.

Want to help the US defend Taiwan? Stop talking about TSMC, and start talking about rebuilding the US defense industrial base, cultivating alliances with Japan and other Asian nations, and, most urgently, putting more vertical launching systems on the water to counter the PRC’s massive navy.

After all, those fabs are hothouse flowers that, one way or another, will die the moment the heat of war scorches Taiwan.

Michael Turton is a columnist for the Taipei Times.

Image: Shutterstock.