TSMC

The Silicon Shield is real, but it’s also overrated. Both Washington and Beijing have a strong interest in TSMC continuing to function. Neither side wants to be cut off from advanced chips. China has spent enormous sums trying to build a domestic alternative, with limited success at the leading edge. The U.S. passed the CHIPS Act and is subsidizing TSMC fabs in Arizona and elsewhere. But Taipei has banned TSMC from making its most advanced chips abroad, so the bleeding edge stays on the island for the foreseeable future. That mutual dependence does create a deterrent against the most catastrop

The honest answer is that nobody knows. If the [People’s Liberation Army] invaded and tried to take TSMC’s fabs intact, the most likely outcome is that the fabs are destroyed in the fighting or sabotaged before they can be captured. TSMC has said that the fabs would be inoperable. Even if the buildings survived, they depend on Dutch lithography machines, Japanese chemicals, American design tools, and a workforce of tens of thousands of highly specialized engineers, many of whom would not stay under Chinese rule. The more realistic and more dangerous scenario is China gaining indirect control o