Taiwanese semiconductor manufacturing prowess might be one reason for China to invade the island and seize fabs belonging to Taiwan Semiconductor Manufacturing Co., United Microelectronics Corp., and Micron. One of the potential responses to such a plan could be evacuating personnel and destroying the fabs, suggested Parameters, a top U.S. army publication recently. But this might be unnecessary, according to Taiwan’s National Security Bureau.
To build chips using leading-edge process technologies, TSMC needs leading-edge chip production equipment from companies like ASML, Applied Materials, and KLA. Even if China invades the island and seizes TSMC’s fabs without access to advanced equipment and ultra-pure raw materials, it will be impossible for China not only to keep developing leading-edge manufacturing nodes but to keep production on current technologies uninterrupted.
“TSMC needs to integrate global elements before producing high-end chips,” Chen Ming-tong, director-general of Taiwan’s National Security Bureau, told Taiwanese lawmakers this week, reports Bloomberg. “Without components or equipment like ASML’s lithography equipment, without any key components, there is no way TSMC can continue its production. […] Even if China got a hold of the golden hen, it won’t be able to lay golden eggs.”
China’s slowing economy, tensions with the U.S., and internal political battles in recent years increased the probability of China’s invasion of Taiwan to seize the island, get a hold of multiple world-class technologies, and improve the approval rating of Xi Jinping. But probability does not mean certainty. China must maintain relationships with the United States and the European Union, its two key trade partners. Furthermore, without access to manufacturing tools and technologies designed in America and Europe and without money from trade partners, China’s occupation of Taiwan might turn into a Pyrrhic victory.
New Export Rules
The U.S. sanctions against China’s supercomputer and semiconductor sectors prove relatively efficient. Late last week, the Department of Commerce’s Bureau of Industry and Security (BIS) published new export rules that impose new license requirements for semiconductor production equipment destined for China starting October 12.
Under the new rules, U.S. companies must obtain a license from the U.S. DoC for tools that can make logic chips using 14nm/16nm nodes or thinner, DRAM ICs on nodes of 18nm and below, and 3D NAND chips with 128 layers or more. Licenses for fabs owned by Chinese entities will face a ‘presumption of denial,’ and licenses held by multinational corporations will be decided case by case.
U.S.-based Applied Materials, KLA, and Lam Research this week ceased to supply appropriate tools to their clients in China, including Semiconductor Manufacturing International Corp. (SMIC) and Yangtze Memory (YMTC). Also, the said companies started to withdraw their employees from YMTC’s fabs. The decision has already reduced the value of the global semiconductor sector by hundreds of billions of dollars, and it remains to be seen how significantly it will affect the businesses of Applied, KLA, and Lam Research.
Yet, the move shows how the U.S. can crack down on China’s semiconductor industry in a few days.
I think you missed the point of the article. It's not as easy as taking the fabs and keeping the lights on. The semiconductor business is much more globally interdependent and requires symmetric cooperation amongst the supply chain for the end product to be commercially viable.
China can invade and take the hen, but it won't do much with it other than comment how nice it looks.
i disagree. 7nm wasnt projected to enter production in china for some time after restrictions were imposed by the US, yet theyre currently producing a close copy of TSMC 7nm
China's SMIC Shipping 7nm Chips, Reportedly Copied TSMC's Tech | Tom's Hardware (tomshardware.com)
If you leave 5nm and 3nm production tools there, China will use them to reverse engineer a way to make their own 5nm and 3nm production lines with the technology they currently have. to believe that they wouldn't find a way to make it work for them is naive given they have decades of experience when it comes to copying things, and its only a matter of time before they have their own version of ASML for tool production
China does have a manufacturing advantage in quanity, so they can concede the edge. Remember Germany vs USSR in WW2. Yes, in today's world it's way more nuanced, but numbers will always triump quality (after a certain thereshold) in War, sorry.
Buddy, they've built a literal exact copy of Paris, France complete with Eiffel tower and everything. They'll figure out how to refine chemicals or they'll simply steal another companies' BKM for doing so and clone it.
Not destroying the equipment and letting China simply walk in and take it for themselves also gives them the proprietary designs for all the world's leading designers like Nvidia and AMD on a silver platter. I'm sure they wouldn't appreciate that.