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US would destroy Taiwan's semiconductor factories rather than letting them fall into China's hands, a former national security adviser says
Britney NguyenMar 14, 2023, 1:23 AM
Former US national security adviser Robert O'Brien told Semafor China would be "like the new OPEC of silicon chips" if it invaded Taiwan and took over semiconductor factories. Costfoto/Future Publishing via Getty Images
- A former security adviser told Semafor the US would destroy Taiwan's semiconductor factories if China invaded.
- Robert O'Brien said China would be able to "control the world economy" if it took over the factories.
- TSMC is the world's largest chipmaker, powering most of the devices and equipment used everyday.
Robert O'Brien, who served as national security advisor under Donald Trump, said the US "and its allies are never going to let those factories fall into Chinese hands."
Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest chipmaker, making up an estimated 90% of the market for advanced processors. TSMC produces chips for most devices and equipment like phones and cars that are used everyday. More advanced chips produced by the manufacturer are used in highly advanced technology like machine learning and guide missiles.
If China were to take control of TSMC factories in the case of an invasion, the country would be "like the new OPEC of silicon chips," O'Brien said, adding that China would be able to "control the world economy."
The former adviser reportedly compared the US destroying the factories to when former British Prime Minister Winston Churchill ordered the destruction of France's naval fleet during World War II after France surrendered to Germany.
Neither O'Brien nor TSMC immediately responded to Insider's request for comment.
iPhone-maker Apple is TSMC's biggest customer, and the manufacturer produces most of the 1.4 billion smartphone processors in the world. Around 60% of automakers reportedly use TSMC's chips.
Although a lot of the research and development for semiconductors happens in the US, the last 30 years saw manufacturers deciding it was best to outsource manufacturing, William Alan Reinsch, a senior adviser at the Center for Strategic and International Studies, previously told Insider.
"You build a big factory and you crank these things out by the thousands, and you do it in a low-wage, nonunion country that probably doesn't have environmental requirements," Reinsch said. "You keep all the design and IP at home and you do all your sales, marketing, and service at home, and that's where you make the money."
O'Brien is not the first to raise the idea of destroying Taiwan's semiconductor factories if China invades. Two US scholars recommended the move in a paper published by the US Army War College in 2021.
"To start, the United States and Taiwan should lay plans for a targeted scorched-earth strategy that would render Taiwan not just unattractive if ever seized by force, but positively costly to maintain," the paper suggests. "This could be done most effectively by threatening to destroy facilities belonging to the Taiwan Semiconductor Manufacturing Company, the most important chipmaker in the world and China's most important supplier. Samsung based in South Korea (a US ally) is the only alternative for cutting-edge designs."
But Chen Ming-tong, director-general of Taiwan's National Security Bureau, has previously said it would be unnecessary for the US to destroy Taiwan's semiconductor factories in the case of an invasion, because the system is already deeply integrated in the global supply chain, meaning production can be shut down by the US and other countries without physically destroying the factories.
For example, TSMC wouldn't be able to produce certain chips without components from Dutch supplier ASML, Chen said. "Even if China got a hold of the golden hen, it won't be able to lay golden eggs," Chen said.
As tensions between mainland China and Taiwan continue to escalate, experts are predicting a Chinese invasion of the island within the next few years. If China does invade Taiwan, "that would be the biggest impact we've seen to the global economy — possibly ever," Glenn O'Donnell, vice president and research director at Forrester, previously told Insider, adding that it could be worse than the stock market crash in 1929.
US would destroy Taiwan's semiconductor factories rather than letting them fall into China's hands, a former national security advisor says
Robert O'Brien told Semafor that China would be "like the new OPEC of silicon chips" if it invaded Taiwan and took over semiconductor factories.
www.businessinsider.com