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TSMC Warns Taiwan-China War Would Make Everybody Losers (cnbc.com) 197

An anonymous reader quotes a report from CNBC: If China were to invade Taiwan, the most-advanced chip factory in the world would be rendered "not operable," TSMC Chair Mark Liu said in an English-language interview with CNN this week. In the undated interview, Liu said that if Taiwan were invaded by China, the chipmaker's plant would not be able to operate because it relies on global supply chains. "Nobody can control TSMC by force. If you take a military force or invasion, you will render TSMC factory not operable," Liu said. "Because this is such a sophisticated manufacturing facility, it depends on real-time connection with the outside world, with Europe, with Japan, with U.S., from materials to chemicals to spare parts to engineering software and diagnosis." The remarks were aired as tensions between China and Taiwan have escalated in recent days as House Speaker Nancy Pelosi visits the island. "The war brings no winners, everybody's losers," Liu said.

Liu compared a potential conflict in Taiwan to Russia's invasion of Ukraine, saying that while the two conflicts are very different, the economic impact to other countries would be similar. He encouraged political leaders to try to avoid war. "Ukraine war is not good for any of the sides, it's lose-lose-lose scenarios," Liu said. Liu said an invasion of the territory would cause economic turmoil for China, Taiwan and Western countries. He said that TSMC sells chips to consumer-facing Chinese companies that need the company's services and the supply of advanced computer chips. "How can we avoid war? How can we ensure that the engine of the world economy continues humming, and let's have a fair competition," Liu said.
Further reading: US To Stop TSMC, Intel From Adding Advanced Chip Fabs In China
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TSMC Warns Taiwan-China War Would Make Everybody Losers

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  • by Ritz_Just_Ritz ( 883997 ) on Wednesday August 03, 2022 @08:07AM (#62758558)

    Eventually, China is going to escalate things. It's just a matter of when, not if. Seems like it would make sense to locate their crown jewels in a more hospitable place.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Eventually, China is going to escalate things. It's just a matter of when, not if. Seems like it would make sense to locate their crown jewels in a more hospitable place.

      They could move their penis to the center of their forehead, just like you.

    • by Mal-2 ( 675116 ) on Wednesday August 03, 2022 @08:21AM (#62758598) Homepage Journal

      That would also play to China's plans. Relocating the one thing Taiwan does particularly well will make them relatively unimportant on the world stage, and then China would wait until the world is napping and grab the island. The only way to save an independent Taiwan is to leave their manufacturing base in place. Moving it elsewhere is essentially abandonment, because the world won't have a reason to care any longer.

      • by Ritz_Just_Ritz ( 883997 ) on Wednesday August 03, 2022 @08:28AM (#62758620)

        The world already doesn't care (mostly). China seems to have successfully bullied and/or paid off the vast majority of nations to politically shun Taiwan. Do I agree with that? No. However, it is a fait accompli. When the shizz hits the fan, the world will make token gestures to virtue signal and then proceed to let China gobble up the island. Just like what's being done in Ukraine and just like what happend in HK and Macau. It's all about the Benjamins.

        • by Iamthecheese ( 1264298 ) on Wednesday August 03, 2022 @09:25AM (#62758808)
          >Just like what's being done in Ukraine

          TPTB made Ukraine into the cause of the hour and poured nearly a trillion dollars into its defense. Sure that's just because they're too stupid to realize that oil will no longer make a return on the investment, but Ukraine is the last thing you want to point to if you're claiming the international community is going to let the little guy get stepped on. Instead try Iraq, the Kurds, Georgia, or Tibet.
          • Most nations don't give two fucks about Ukraine, but they do care about stopping Russia from building another empire.

            • by ksw_92 ( 5249207 ) on Wednesday August 03, 2022 @01:35PM (#62759746)

              Actually, quite a few countries give more than a pair of fucks about Ukraine as it sits on some major pipeline routes, is a major food-stuff producer, has plenty of needed resources and mature (though now less, what with all the destruction) industrial capacities. Africa and the Middle East are two areas that quite rightly give a some fucks about this war; they just don't have much leverage to do anything about it.

              The US and its allies are gambling on Ukraine being able to retain control most of the above attributes. The money the US pours into this war will likely be paid back in increased influence in places that rely on Ukrainian products and services to keep their people from starving or freezing. This kind of power projection is the opposite of what the Chinese have been doing with their dumping money via loans into Africa (and owning the results, sometimes after a default) and I think represents a more "friendly" kind of power that will have longer-term influence.

              Imagine for a moment if the CCP had thought like this and started dumping arms and money into Ukraine. It's hard for me to not tie this line of thinking to Pelosi's recent trip.
               

        • I agree that China has been busy lobbying/bullying everyone it can to isolate Taiwan. But I wouldn't underestimate the strategic importance of world leading fab technology. The US won't allow China to grab TSMC, nor will they allow the tech to be destroyed. So if TSMC won't leave Taiwan, then the US has no choice but to protect the asset. in addition, the US is in a peer competition with China, so they have even more incentive to protect TSMC if it means screwing over China.

          Taiwan/TSMC's main concern is l

        • by AmiMoJo ( 196126 )

          Realistically what can the world do, in either Taiwan or Ukraine?

          China and Russia have nuclear weapons. If we want to avoid a nuclear war, then at best the most we could do is fight a conventional war where the only possible outcome is stalemate, us unwilling to invade and get nuked, them unable to continue fighting us conventionally. We would be there forever, like the two Koreas standing off against each other.

          It would be a new cold war. We have to find a better solution than that.

          • There's no cold war waiting. NK doesn't need to build up more military might because the only people they're trying to fool are their own citizens, and they know if they start anything conventional they will get stepped on quickly. China's best bet is to simply keep threatening to invade Taiwan until fabs are inevitably built elsewhere, and Taiwan becomes less geopolitically relevant. Taiwan will continue to prepare to destroy their own fabs if China invades, which is close enough to nuclear MAD as makes no

        • China seems to have successfully bullied and/or paid off the vast majority of nations to politically shun Taiwan. Do I agree with that? No. However, it is a fait accompli.

          It is not fait accompli because the US supports Taiwan militarily.

        • The world already doesn't care (mostly). China seems to have successfully bullied and/or paid off the vast majority of nations to politically shun Taiwan. Do I agree with that? No. However, it is a fait accompli. When the shizz hits the fan, the world will make token gestures to virtue signal and then proceed to let China gobble up the island. Just like what's being done in Ukraine and just like what happend in HK and Macau. It's all about the Benjamins.

          Most people think Ukraine is going to win the war against Russia. I don't know if they retake all currently occupied territories, but at this point it's very hard to see Russia winning.

          Now, as for what happens if China invades Taiwan... well China is a lot stronger than Russia, in economics, military, and influence.

          At the same time Taiwan is an island with more advanced weaponry than Ukraine and there is a real possibility that the US decides to intervene militarily and defend Taiwan, the US is much closer

        • What leads you to believe that? To me, it looks like it's the other way around. Everyone knows Taiwan is an independent country, but no one is allowed to say it for fear of China throwing a tantrum. So everyone avoids talking about it in the interests of keeping the peace. But it's still true and everyone knows it's true.

          In Chinese culture, the idea of saving face is very important. It's ok to lose, but it's not ok to admit you lost. So the world gives China a way to pretend they own Taiwan without al

    • by bobby ( 109046 )

      If I were Taiwanese, I'd probably scuttle the fabs and other valuable tech if the Chinese invade. Kind of like range safety on a rocket...

      • If the world didn't even try to defend Taiwan, why should the Taiwanese sacrifice themselves for the world?

        • It's not for the world, it's to stay out the slave camps. If the CCP is going to kill you anyway you may as well try to take a few of them with you.

          There is also the concept of a humanitarian trap where the cost of reassembling a functioning regional economy is a drain on the invading power. Whether Emperor Xi cares about that I don't know, given the history of socialists I wouldn't think so. They have a Vision, and the number of bodies they have to stack to get there is usually irrelevant.

          Holodomor, the G

      • If I were Taiwanese, I'd probably scuttle the fabs and other valuable tech if the Chinese invade. Kind of like range safety on a rocket...

        Nope. The Taiwanese, for the most part, will simply go "Oh well, there's a new boss. Time to adapt". You'll have a few people making a big deal about "fleeing to freedom" in the US or UK or some other place, but once it becomes apparent that no one is riding to their rescue, most people in Taiwan... including corporations... will more or less accept it. China knows that for all our bluster, the US or Japan or Australia isn't going to go to war over Taiwan.

        • by NFN_NLN ( 633283 )

          “There is a level of admiration I actually have for China because their basic dictatorship is allowing them to actually turn their economy around on a dime." - Justin Trudeau

        • Invading Taiwan would be like Gallipoli [wikipedia.org] but on hard mode. At Gallipoli, most of the landing spots weren't mined up and defended. Taiwan has been producing a domestic supply of anti-ship missiles for decades. Chinese transport ships would be under fire before they left port.

        • China knows that for all our bluster, the US or Japan or Australia isn't going to go to war over Taiwan.

          Right now literally the whole planet depends on Taiwan for top-grade microprocessors.

      • Do you think China's generals know what a TSMC is? They'll exercise hubris and probably attack the factories thinking it is something dangerous/useless. They will assume there is nothing special about it and that their own engineers/scientists can build any of that technology. You have to think like a nationalist, which is someone who believes any tribe other than their own is inferior. Acknowledging that TSMC has superior technology isn't something compatible with a nationalist mind. I've been studying nat

    • Ecosystem (Score:5, Insightful)

      by JBMcB ( 73720 ) on Wednesday August 03, 2022 @08:35AM (#62758636)

      There's a reason even non-US car companies have major offices in the Detroit area. Most of the ecosystem for building cars in the US is centered around Detroit. All three tiers of parts suppliers, law offices, engineering firms, factory automation suppliers, factory integrators and assemblers, QA companies, testing and compliance companies, federal regulators - they are all in the Detroit area.

      Tesla has these problems every time they set up a factory - Siemens and Fanuc have a presence in California but those engineers don't know anything about setting up car assembly lines (and those companies aren't going to redirect their knowledgeable engineers away from the super-profitable established car companies to work on one factory in the middle of nowhere, CA) So, you end up with final assembly being in tents in the Tesla factory parking lot because they can't get integration working properly.

      Same thing with hard drives, chip manufacturing and circuit board manufacturing in Taiwan. It's not just moving a single factory, it's moving a whole ecosystem to stand that factory up. That, and the supply chain, which is a whole other ball of wax.

      It's not impossible, it's just a *lot* more work than you would expect.

      • Re: (Score:3, Informative)

        by cb88 ( 1410145 )
        Used to be anyway... there are only 2 factories left in Detroit as of 2013, as of 2022 GM is only making a handful of high margin EVs (for which they also can't get chips for because theyd don't have a local supply chain).

        The real major ecosystem for building cars moved to China, Mexico, Korea and Japan long ago.

        Detroit is stuck only making low volume niche vehicles like the Volk and Jeep Grand Cherokee.... but even that is just assembly the manufacturing itself isn't even there.

        To add insult to injury the
        • by Zak3056 ( 69287 )

          there are only 2 factories left in Detroit as of 2013

          This is not true, unless you define "in Detroit" as "specifically within the city limits, suburbs need not apply" (and even then, it's still incorrect--Stellantis has two plants and GM has one). Metro Detroit has nine assembly plants. If you fudge things a bit and say "within 75 miles of downtown Detroit" you add another four or five.

      • So, you end up with final assembly being in tents in the Tesla factory parking lot because they can't get integration working properly.

        At this point Tesla has earned its chops in expertise in setting up factories. I will bet money (actually have bet money) on their ability which has little or nothing to do with Detroit and even less to do with the wisdom of people still pushing old debunked tropes like the one above.

        The numbers don't lie. Tesla's factory in Fremont has proven to be the most productive in the U.S. [electrek.co]

        And the same applies to their mastery of their supply chain. While Detroit car makers are shipping cars without parts or no

      • There's a reason even non-US car companies have major offices in the Detroit area.

        Chicken tax.

        OK, I exaggerate, but would they build so many vehicles here if they didn't have to build light trucks here to make them profitable?

        All three tiers of parts suppliers, law offices, engineering firms, factory automation suppliers, factory integrators and assemblers, QA companies, testing and compliance companies, federal regulators - they are all in the Detroit area.

        The suppliers aren't so relevant, because most of the foreign automakers' suppliers are foreign. All that other stuff matters, though.

        Tesla has these problems every time they set up a factory - Siemens and Fanuc have a presence in California but those engineers don't know anything about setting up car assembly lines (and those companies aren't going to redirect their knowledgeable engineers away from the super-profitable established car companies to work on one factory in the middle of nowhere, CA) So, you end up with final assembly being in tents in the Tesla factory parking lot because they can't get integration working properly.

        Tesla also tried to build vehicles with 100% automation and then figured out that wasn't going to happen.

    • Why not just be strong about defending Taiwan, our ally, and make it clear that attacking Taiwan is like attacking Arizona? I am sorry, but so far the US has only supported allies in a half-ass manner. Ukraine, we wussies out thinking it could start a nuclear confrontation. We should have had a secret propaganda campaign against Putin years ago, just like how Russia did to us. Communism was unable to maintain its grip, like how the North Korea dynasty regime has, because we had campaigns like Voice of Ameri

      • Because China believes Taiwan to be part of their territory and the US isn't in charge of the planet.

        • But China isn't in charge of Taiwan. That is up to the Taiwanese people.

          If China wants Taiwan to join them, they should convince the Taiwanese people to vote in favor of that. Xi has instead threatened to kill Taiwanese people, which frankly hasn't been very enticing to the people of Taiwan.

      • I am sorry, but so far the US has only supported allies in a half-ass manner. Ukraine, we wussies out thinking it could start a nuclear confrontation.

        This is entirely on Biden. It was his decision. It's not easy to figure out why he does what he does, but he has twice said the US will defend Taiwan militarily, and the US military supports his words by sending an aircraft carrier to Taiwan every time the situation heats up. Check it out. [usni.org]

    • by splutty ( 43475 )

      The T in TSMC stands for Taiwan. So that might just be a reason why the factory is in, you know, Taiwan.

      Taiwan Semiconductor Manufacturing Company Limited in full.

    • TSMC already operates facilities in Shanghai, Nanjing, and USA (Camas, Washington). Soon to open more in Arizona and Japan. And has offices all over the world where work not directly related to the manufacturing floor can continue even if Taiwan is under blockade or invasion.

      If China is left unchecked there will not be a such thing as a hospitable place for most of the world's technology manufacturing. Theoretically we could manufacture things anywhere, but after three decades of whining about it the result

  • If china wants the tech they can go to war with EU and USA then.

  • Rendered (Score:5, Informative)

    by necro81 ( 917438 ) on Wednesday August 03, 2022 @08:50AM (#62758690) Journal

    If China were to invade Taiwan, the most-advanced chip factory in the world would be rendered "not operable," TSMC Chair Mark Liu said in an English-language interview with CNN this week.

    Gotta love the use of the passive voice.

    The wider context makes clear that "rendered 'not operable'" would be the result of disruptions to everything the fab needs to continue operating (power, consumable supplies, raw materials, parts, people, know-how, etc.). I expect the seismic upsets from bombs would also cause yield problems.

    But "rendered" could also be a not-too-veiled way to say: we will destroy the fabs rather than allow China to seize them by force.

    • But "rendered" could also be a not-too-veiled way to say

      I think you are overanalyzing a passing statement. This isn't a carefully worded legal document. Heck it isn't even a vetted PR response. It's a reply to a question during an interview.

      Don't read more into the statement than what is written (or rather what was spoken).


  • If China wants the island so much why not give it to them by evacuating the entirety of the *willing population* to the US and other participating countries? It'll probably be the largest organised migration ever conceived.

    I know this sounds crazy and likely will never happen BUT isn't it a better alternative to having all this US/China BS that may genuinely drag us all into war? Biden needs to look tough on China, he needs some political wins as his ratings are garbage. China cannot appear to be intimida
    • by dskoll ( 99328 ) on Wednesday August 03, 2022 @09:51AM (#62758918) Homepage

      How many people will willingly abandon their native country? And how eager will the US or EU be to take in millions of brown immigrants? The nationalist underbelly in the US and Europe would go berserk.

    • by jacks smirking reven ( 909048 ) on Wednesday August 03, 2022 @09:57AM (#62758940)

      That is a level of capitulation I don't think the current world hegemony can let stand and will cause widespread economic disruption and really just going to tell China "take what you want, we'll work around it" and really puts all the other western allied nations on the chopping block as well. What happens when they suddenly decide Korea has always been a part of their sovreign territory as well? We're basically ceding the region over to China at that point.

      Also putting the US Navy with 2-3 carrier strike groups, probably a dozen submarines, all the Air force in Guam, Okinawa and elsewhere, combined with that of the regional nations like Japan, Korea, Australia and in a purely defensive war of an island nation is it really a nightmare? Yes it will be nasty but the US military is at it's best when it's defeinding terriroty and when it has moral justification for using force. I think deep down China knows it stands to lose a lot. Taking the action and ending up in a stalemate will make it an international pariah and set back all the economic progress it has built over the decades.

      Yes we get a lot of products from China but without the massive US/EU markets to sell that product into China loses almost all it's economic momentum, especially at a time when it is starting to show vulnerability there.

      • That is a level of capitulation I don't think the current world hegemony can let stand and will cause widespread economic disruption and really just going to tell China "take what you want, we'll work around it" and really puts all the other western allied nations on the chopping block as well. What happens when they suddenly decide Korea has always been a part of their sovreign territory as well? We're basically ceding the region over to China at that point.

        Also putting the US Navy with 2-3 carrier strike groups, probably a dozen submarines, all the Air force in Guam, Okinawa and elsewhere, combined with that of the regional nations like Japan, Korea, Australia and in a purely defensive war of an island nation is it really a nightmare? Yes it will be nasty but the US military is at it's best when it's defeinding terriroty and when it has moral justification for using force. I think deep down China knows it stands to lose a lot. Taking the action and ending up in a stalemate will make it an international pariah and set back all the economic progress it has built over the decades.

        Yes we get a lot of products from China but without the massive US/EU markets to sell that product into China loses almost all it's economic momentum, especially at a time when it is starting to show vulnerability there.

        Russia invading Ukraine has shown just how much more advanced western (especially US) military hardware and training is than the rest of the world, even when you exclude air-power (which western militaries are designed around).

        Now is China's best opportunity given the distraction of Ukraine... but they should be realizing that their military might not fare much better than Russia's.

    • by k6mfw ( 1182893 )
      Considering that throughout the ages in many situations it makes no sense for one country to go to war with another because both have mutual business arrangements or it will be devastating to their economies or done with false pretenses that will wipe out their credibility among other nations, but they do it any way.
    • A much better approach is to diplomatically build a coalition of free countries, who don't like that the CCP has threatened to kill Taiwanese people.

      That way the situation can be resolved without violence.

      If we evacuate the island and give it to the CCP, what will we do when they want the Philippines?

  • Totally agree that wars are lose-lose-lose, e.g. invading Afghanistan, Vietnam, & Iraq, voting for extremist populist leaders, & voting for isolation (e.g. Brexshit). Then there's anti-vax (There's a Polio outbreak in a county in the USA - Polio's an extremely infectious disease & ~1 in 200 is paralysed by it) What else is there?
    • Totally agree that wars are lose-lose-lose, e.g. invading Afghanistan, Vietnam,

      What about invading Nazi Germany?

      • Totally agree that wars are lose-lose-lose, e.g. invading Afghanistan, Vietnam,

        What about invading Nazi Germany?

        Your lack of knowledge of history is disturbing.

        • How so? Didn't the allies invade Nazi Germany in 1945?
          The UK and France could have just let Germany take Poland in 1939, and the USA could have not reacted to the Pearl Harbor attack. Or react against Japan only, but not its German ally.

          Wars are never a good thing. However, sometimes going to war is the good thing. To defend freedom and democracy. The liberation of France was a good thing. Going to war to defend Poland was a good thing (and very courageous of France and the UK). Defending democratic Taiwan

      • by dskoll ( 99328 )

        Fighting Nazi Germany was an imperative. It takes two sides to make peace, but only one to make war. The Nazis were rampaging across Europe unprovoked (kind of like Putin's doing in Ukraine.)

        So far, there hasn't been actual war between China and Taiwan. We should do everything in our power to make China decide that war is not in its interest.

  • sooner or later the dictator needs a distraction. Or they just get old (like Putin) and want one last hurray.

    I say this because America is very seriously considering installing a dictator. We tried about 18 months ago, and I suspect we'll try again in 8 years. A certain group of Americans, who form a political minority, think their guy should be in charge. Thanks to our bizarre electoral system they've been able to get that guy in office temporarily despite the majority opposing it. This opened the door
    • Also ironic that the same group that has been crowing for years about "getting tough on China" and when the current admin start's doing just that, with broad support from Taiwan's government and people and now they are suddenly crying and worried about "saber rattling"?

      It shows a definite lack of conviction about any principles besides just blind opposition.

      • he claimed it would make them free. Instead our corporations are censoring media and employees to avoid angering China. Instead of us exporting our freedom we're importing their oppression.
      • by DarkOx ( 621550 )

        I don't think have been reading the outputs of the conservative thinking on this very closely.

        Most of them are worried about the saber rattling coming from Congress in the context of an administration they fell is 'unlikely' back that with the actual use of said saber. They are (rightly if you ask me) very worried that Nancy's litter visit could trigger moves by China to outright attack or otherwise further isolate Taiwan and the Biden administration being unwilling DO anything about it if there is any pain

        • Why is less likely that the Biden administration and a Democratic congress would not do anything about it?

          Biden outright said the US would defend Taiwan directly.

          Pelosi has always been something of a China hawk her entire career and this trip of her carries with it the idea that she can whip congressional support for their defense as well. Shes not just some congressperson, shes the Speaker of the House.

          I am biased against conservatives for sure, I readily admit that, but my assesment of this is conservati

    • Thanks to our bizarre electoral system

      There is nothing 'bizarre' about the system. Each state has a minimum amount of political power assigned to it (i.e., electoral votes based on senate/house representatives). What SHOULD change is the 'winner take all' system that nearly every state has bizarrely setup.

  • by Petersko ( 564140 ) on Wednesday August 03, 2022 @09:38AM (#62758856)

    Saw the chairman of the company on GPS on Sunday. The gist of it was that China can't simply annex TSMC. It relies on such an interconnected network of skills around the world that any attempt to seize it would simply render it inoperable. That sounds right to me. Nobody wins.

  • We are putting all of our eggs in someone else's basket. This is where outsourcing has us.
  • It would have been healing fine, maybe slightly uncomfortable, if left alone (keep the status quo).
    But after Ukraine everyone got itchy and started scratching it (status quo isn't good enough we have to DO something).
    Careful for the Marley paradox: https://www.genolve.com/design... [genolve.com]
  • America has chip making capabilities, so while yes American industries would take a hit, it would be a hit the American economy could manage and the transition away from relying on outside countries for chips is already underway. In fact, TSMC is already building new plants in the US, so TSMC's transition out of Taiwan is already underway.

    But speaking from a geopolitical perspective, countries are powerful only in relation to one another. China seems powerful today relative to the US, and as a result

  • "[TSMC] depends on real-time connection with the world" Um...did they just announce to the world that a simple DDoS could take them out? Because it sure sounds like a simple DDoS could render them inoperable. Their words, not mine.

    • So what? Anyone could be harmed with a successful DDoS, it's not like you've just discovered a secret weakness.

  • All China needs to do is destroy TSMC, not Taiwan. China is well on its way to doing everything TSMC can do already, and it would totally screw the rest of the world.

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