There are two theories floating around on the role that Taiwan’s chip fabs, especially the highly advanced Taiwan Semiconductor Manufacturing Co. (TSMC) fabs, could play in Taiwan’s national security. They’re both contradictory, and they're both wrong.

One theory is that since China’s efforts at catching up to Taiwan’s semiconductor industry — which is the world’s most advanced — have failed so far, and China is so dependent on foreign chips, technology acquisition could be a major motivator for an invasion of Taiwan. China’s “Big Fund” to spur the industry, industrial espionage and poaching of Taiwanese engineers has still failed to close the gap.

TSMC alone has over 50% market share in the foundry market, and the company produces over 90% of the world’s most advanced chips. The world’s economies, infrastructure, and militaries are highly dependent on chips, and Taiwan holds a commanding position.

Controlling the spice

The thinking goes that China might consider an invasion to seize control of the industry, thereby giving China enormous economic and geopolitical leverage. Like controlling the spice in Dune.

A piece in the U.S. Army War College Quarterly “Parameters” even went so far as to suggest a “Broken Nest” strategy whereby Taiwan would threaten to blow up the chip fabs if an invasion looked imminent as a deterrent to make Taiwan “unwantable” to China. The American Enterprise Institute ran a piece suggesting a modern version of Operation Paperclip — which saw the U.S. evacuating top scientists and engineers out of Germany at the end of WWII — and called for the U.S. government to coordinate with Taipei to come up with a plan to quietly fly top semiconductor industry engineers out of the country if a war looked imminent.

Both proposals assume that seizing Taiwan’s semiconductor industry is high on the Chinese Communist Party’s (CCP) priority list. It’s not. If it is on the list at all, it would rank fairly low.

There are two reasons for this. It’s not what primarily motivates Xi Jinping (???) and the CCP, and it wouldn’t work anyway.

What motivates Xi Jinping and the CCP

Far and away, the primary priority for Xi and the CCP is staying in power. Nothing else comes remotely close.

An invasion of Taiwan would be mostly about domestic considerations. Perhaps if there was turmoil inside China, the CCP may turn its sights on Taiwan to distract and rally the public.

Or perhaps Xi reckons that the massive economic damage China (and the world) would take by going to war over Taiwan was worth the cost if he felt it would entrench the party’s hold on power and raise his and the party’s prestige. This is the man who had “Xi Jinping thought” added to the constitution, so personal prestige and dominance are clearly important to him.

t would be a seriously risky move, however, as they could lose the war and fail to take Taiwan. That would have serious repercussions domestically and risk his hold on power.

Expanding power and breaking the first island chain

Further down the list would be to expand power. By taking Taiwan, the CCP would break the first island chain — the string of islands friendly to the U.S. running through Japan, Taiwan, and the Philippines — and allow the People’s Liberation Army Navy (PLAN) unfettered access to the Pacific Ocean.

Off Taiwan’s east coast, the coastal shelf drops off, which would allow Chinese submarines deep water access and make them harder to detect. They would also gain control of the shipping lanes that supply Japan and South Korea with key imports like oil, putting China in a strong position to pressure both countries.

It’s also possible that Xi and some top CCP cadres genuinely believe that “reuniting the motherland” is necessary to “restore China’s greatness” and rectify the “historical wrongs” of the so-called “century of humiliation.” Taiwan does factor in Xi’s “Chinese dream.”

Capturing Taiwan’s semiconductor industry is below all those priorities, in large part because of how the CCP thinks, but also because it wouldn’t work anyway. For one thing, a lot of stuff tends to get broken in a war.

It wouldn't work anyway

Even if they were successful in invading Taiwan, it would take time to get the ports, power supplies, water, and basic infrastructure back online. In the best case scenario, even if the chip fabs were still intact, it would take quite a while for enough of the economy and infrastructure to be functioning well enough to restart the fabs.

It’s also not likely that they would be totally intact, they may have gotten hit in battle, bombed, or sabotaged. Chip fabs are also quite fragile environments, and even tiny amounts of dust are a huge problem — and war tends to kick up a fair bit of dust.

And it’s not just the fabs, all of the other factories in Taiwan involved in the supply chain would have to become operational again as well. A chip is useless, for example, if the testing and packaging company isn’t operational.

What about the personnel to run them? Quite a few no doubt would have fled, or died.

By the time they got all the pieces in place and up and running again, Samsung or Intel may have advanced their technological edge past TSMC’s anyway.

Even if the CCP could somehow solve all those problems, it still wouldn’t work. If they launched an invasion, the world would almost certainly respond with sanctions.

Supply chain woes

The semiconductor supply chain is in the hundreds of suppliers that are scattered around the world. Chemicals from Europe, lithography machines from the Netherlands, gases from various countries, and so on.

Supply chain woes

The semiconductor supply chain is in the hundreds of suppliers that are scattered around the world. Chemicals from Europe, lithography machines from the Netherlands, gases from various countries, and so on.

Additionally, while TSMC is the most advanced chip manufacturer, the chips are usually designed by companies overseas, and this market is dominated by U.S. companies. With sanctions in place, China simply wouldn’t be able to get the supplies and inputs needed to actually produce semiconductors.

It would take a long time to be able to recreate the entire supply chain inside China and in friendly countries. It might be impossible.

Tune in to an upcoming column on the second wrong theory, the so-called “silicon shield” that would supposedly protect Taiwan against a Chinese invasion.

By: DocMemory
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