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Hypothetical TSMC invasion 'absolutely devastating' says Raimondo

(2024/05/09)


The US Secretary of Commerce says it would be "absolutely devastating" if China seized Taiwan Semiconductor Manufacturing Company (TSMC) and locked down the South China Sea.

“I'm not commenting on whether that's going to happen, how it's going to happen, or if it's going to happen, but what I can tell you is right now the United States buys 92 percent of its leading edge chips from TSMC in Taiwan," [1]testified the secretary before the House Appropriations Committee yesterday.

Although the imported chips are vastly ahead of any semiconductors currently made in the USA, TSMC is slated to produce 2 nm and 3 nm chips in Arizona. The 2 nm chip production was initially [2]scheduled to come online in 2026, but that was modified last month to 2028, when the fab would also produce 2 nm. TSMC is receiving $11.6 billion in funding from the US for the three Arizona fabs.

[3]

Congressman Jake Ellzey and Raimondo agreed during Wednesday's hearing that around a third of the world's commerce travelled through the South China Sea, making it essential to defend the area, including Taiwan.

[4]TSMC scores $11.6B funding infusion for Arizona fabs, now plans for third plant

[5]US Army journal's top paper from 2021 says Taiwan should destroy TSMC if China invades

[6]TSMC fully booked on advanced packaging until 2025

[7]Teardown confirms Huawei's Pura 70 contains SMIC 7nm process node

China views Taiwan as a breakaway province yet Taiwan sees itself as master of its own domain. Some commentators think China has watched with interest the world's reaction to Russia invading Ukraine.

The scenario where China seizes Taiwan and TSMC has been the subject of many thought-exercises in the past. One of the most downloaded papers of 2021 from the US Army War College academic journal Parameters [8]suggested that if the scenario became an imminent reality, the US should commit to bomb TSMC themselves.

[9]

[10]

Ellzey is not the only government official concerned about the state of the South China Sea, which is a part of the Indo-Pacific region. The Select Committee on the Chinese Communist Party (CCP) [11]warned on Wednesday that the Pentagon is currently displaying an "alarming lack of urgency" regarding the vulnerability of US military bases in the Indo-Pacific.

According to the committee, "unclassified analysis suggests China has enough weapons to overwhelm [US] air and missile defenses protecting those bases" and strikes could "immobilize vital air assets, disrupt logistical chains, and significantly weaken [US] ability to respond in a conflict."

[12]

In her testimony, Raimondo redirected national security concerns away from such physical structures to the war tools of the digital age.

"When you think national security you might think guns, tanks, missiles, fighter jets. I think semiconductors, quantum, AI models," said Raimondo.

"What we are doing at the Commerce Department is constantly studying these dual-use technologies to figure out what do we have, where is China, and make certain that China cannot access our technology for their military," she added. ®

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[1] https://www.youtube.com/watch?v=WzEyveqnf78

[2] https://www.theregister.com/2024/04/08/tsmc_116b_arizona_funding/

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZjzzIY6HzKoFdNEa13FVWQAAAIs&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[4] https://www.theregister.com/2024/04/08/tsmc_116b_arizona_funding/

[5] https://www.theregister.com/2022/01/05/taiwan_should_destory_tsmc_paper/

[6] https://www.theregister.com/2024/05/07/tsmc_advance_packaging/

[7] https://www.theregister.com/2024/04/29/teardown_confirms_huaweis_pura_70/

[8] https://www.theregister.com/2022/01/05/taiwan_should_destory_tsmc_paper/

[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZjzzIY6HzKoFdNEa13FVWQAAAIs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZjzzIY6HzKoFdNEa13FVWQAAAIs&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[11] https://selectcommitteeontheccp.house.gov/media/press-releases/moolenaar-rubio-lawmakers-warn-about-pentagons-alarming-lack-urgency-address

[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZjzzIY6HzKoFdNEa13FVWQAAAIs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[13] https://whitepapers.theregister.com/



China IS watching

tmTM

American support for Ukraine is plenty vocal, but material support recently has been lacking. Just look how long it took them to finally approve the latest wave of support.

If they give up on Ukraine you can bet they'll give up on Taiwan, China will see a green light and go for it.

Re: China IS watching

VicMortimer

Not the same at all.

Ukraine doesn't really produce anything the US needs. Supporting them is the right thing to do, but it's pretty clear at this point that Russia isn't a threat to NATO as it currently exists. Sure, it would be nice to add Ukraine to NATO, but you may have noticed that despite making a lot of noise about it, Putin hasn't done diddly any time we crossed one of his "red lines".

Taiwan on the other hand... remember Kuwait in the '90s? US response would look a lot more like that. Probably wouldn't turn into regime change in China, but it might. It wouldn't just be weapons packages, US troops would be involved. I suspect Japan would jump in too, along with England, France, Germany, Australia, Korea.... It would look a lot like a world war.

Taiwan has made itself necessary. China would be foolish to try.

Re: China IS watching

StrangerHereMyself

If China reads this wrong it could lead to the deaths of hundreds of millions of people. Taiwan is important to the U.S. economy and therefore will not be so easily abandoned. The U.S. is diligently moving production of vital semiconductors to the continental U.S., but that takes time.

China (or more specifically Xi Jingpin) needs to ask itself if gaining Taiwan is worth losing access to the entire Western market, including Europe and the U.S. Maybe they should take a hard look at Russia whose economy in the long run will be ruined by not having access to Western technology and products. Russia may win the war with Ukraine but in the long run they'll go bankrupt just like the Soviet Union did.

Peter2

Congressman Jake Ellzey and Raimondo agreed during Wednesday's hearing that around a third of the world's commerce travelled through the South China Sea, making it essential to defend the area, including Taiwan.

Most of that commerce is travelling to (or from) China which is also the only credible threat to peace in the region.

If China decided to start building an empire by invading their neighbours then the decisive weapon is not bullets, bombs, missiles or the threat of using them. It's everybody in "the west" saying "if you decided to start forming an empire, we'll stop buying things made in China and go back to making our own stuff" and mean it, with no path back to buying from them again, no matter how much they offer in bribes.

As exports is the source of almost all of Chinas wealth which would evaporate literally overnight this is something that they are likely to fear considerably more than us killing any number of their people; remember that in a system where the plebs can't vote then the leaders don't care about shoving them into a meat grinder. (As seen in Russia at the moment)

I ain't Spartacus

Peter2,

The problem is that our plebs can vote. And the Chinese government know it. Putin thought this allowed him to invade Ukraine, because of his domination of European gas markets. Oops! But de-coupling from China will be a much more painful process, and do much worse damage to our economies. There just aren’t the alternative sources for some goods.

If they can seize Taiwan in quick 2 day operation, many governments will find excuses to do as little as possible. That’s what happened with Crimea, and we recognised that as part of Ukraine. We all still officially go along with the Chinese lie that Taiwan is part of China…

Worse, I don’t even have to be right about this. Xi Xinping just has to believe it. I’m sure Putin thought invading Ukraine would go fine…

Anonymous Coward

"the Chinese lie that Taiwan is part of China…"

The one that's written into the Taiwanese constitution?

Anonymous Coward

This is because the CCP illegally took power in West Taiwan. But the regime will collapse soon. People are just fed up. Anything can trigger a revolt and turn into a revolution.

Anonymous Coward

No no no. You misunderstand what that means.

Mainland China is just some breakaway provinces of the Republic of China.

Anonymous Coward

Winnie the Xi isn't that stupid.

He knows he doesn't have the ability to take Taiwan. He literally can't get the troops there, he doesn't have enough landing craft, there's always a US carrier group nearby to start sinking what he does have and splash his planes. Any troop and ship buildup would be noticed well before any attempted operation, more carrier groups would be sent.

He can make noise. But that's all he can do without getting his ass handed to him.

Dostoevsky

China imports ~50% of its oil. Most of that comes by sea. If China does anything stupid, those tankers would evaporate. The pipelines would be severed, and China would have to run on its reserves and domestic production for the entirety of the war.

Meanwhile, the US showed that it is energy-independent under the last administration. There's really no contest.

I ain't Spartacus

Our economies are also dependent on Chinese goods for our supply chains. Russia had no export markets for its natural gas, as the pipes mostly ran to Europe, and is economically dependent on Western imports. European economies were so inter-dependent that war was impossible by 1914.

Leaders who make decisions due to nationalism and personal feelings often make poor choices. And rarely listen to their economic advisors.

As was shown with Ukraine, the only way to deter aggression is to create a near certainty that it will fail. That means credible defensive alliances, or helping allies get sufficient weapons that invading them looks impossible. China has consistently deterred us from supplying high tech weapons to Taiwan with unspecified threats of harsh diplomatic language. Why would they believe we’d fight?

Typically there’s a greater chance we would. This is how dictatorships and democracies fail to understand each other, and stumble into wars neither want. Misunderstandings of both intent and willpower.

Dostoevsky

Who's "we"? The US hasn't been deterred from providing Taiwan with cruise missiles and modern F-16s.

Other than that, I agree! A war ultimately means everyone loses, with some losing worse than others. There'd be no victors.

Defend

StrangerHereMyself

I'm not a military expert but I believe Taiwan is relatively easy to defend. It's situated almost a 100km from the mainland and using submarines and anti-ship missiles the Taiwanese should be able to fend off an invasion from the PLA with ease. Sure, China could bombard the island with rockets but that wouldn't change the status-quo.

A Chinese attack on U.S. military assets in the region would spell disaster since it could easily escalate to a nuclear exchange.

Re: Defend

Dostoevsky

The Taiwanese have turned their island's eastern half into a mountainous fortress, with the western half as an urban kill zone. The Chinese Navy would take huge losses from the Taiwanese alone; never mind the USN's subs and carriers.

TSMC is vital to China too

adam 40

A handful of dirt in every clean area would put it out of action for years.

Would China want to risk that - invade and have it sabotaged from underneath them?

Also Taiwan own a lot of fabs on the mainland, and the same could happen.

Re: TSMC is vital to China too

StrangerHereMyself

The logic of dictators usually doesn't add up. Nobody thought Putin would invade Ukraine because he'd risk losing access to Western markets and technology. He went ahead and did it anyway. I'm therefore not at all sure that China will NOT invade Taiwan, even if it would mean economic suicide.

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