US tech giants exposed if China takes Taiwan | #espionage | #surveillance | #ceo

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Much has been written about a possible Chinese takeover of Taiwan, the threat such an invasion would pose to other regional countries and what the United States might or might not do in response.

Books and articles have expounded on the political, military and geostrategic aspects of the problem, with intriguing maps of the first and second island chains blocking China’s access to the Pacific Ocean. 

But these analyses about Taiwan’s fate often ignore one of the most worrying aspects of the problem: American reliance on Taiwanese semiconductor manufacturing.

As David Arase, professor of international politics at the Hopkins-Nanjing Center of the Johns Hopkins University School of Advanced International Studies, notes, “Even an unsuccessful invasion of Taiwan would cause a supply chain disruption.”

Taiwan Semiconductor Manufacturing Company (TSMC) has, of course, received a lot of press coverage in regard to America’s dispute with Chinese tech giant Huawei.

TSMC insists its chips for Huawei do not fall into the category of the US ban. Photo: CNA

Under pressure from the US government, TSMC stopped taking orders in mid-May from Hi-Silicon, the integrated circuit design arm of Huawei. In 2019, Hi-Silicon had accounted for 14% of TSMC’s revenues. So the halt represented a substantial sacrifice for TSMC. 

TSMC has also agreed to build a factory in Arizona to help bring the semiconductor industry back to America, even though it’s not an economically sound proposition.

However, considering that TSMC’s founder, the legendary Morris Chang, spent 25 years at Texas Instruments, this is not as surprising as it might seem. Most of TSMC’s business comes from America.

TSMC is the world’s largest and most technologically advanced dedicated semiconductor foundry, with about half of the global market for contract chip manufacture.

TSMC produces semiconductor devices designed by AMD, Apple, Broadcom, Nvidia, Qualcomm, Xilinx, Texas Instruments and other American companies; by Japanese semiconductor makers Renesas and Sony; and by European companies NXP and ARM (owned by Japan’s Softbank).

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