TSMC chairman says ‘no one can control TSMC by force’ amid escalating US-China tensions

In the context: The TSMC chairman warned that a Chinese invasion of Taiwan would put the company’s factories out of service, emphasizing that “no one can control TSMC by force.” A rare interview with Mark Liu comes as tensions between the US and China are at an all-time high over House Speaker Pelosi’s plans to visit Taiwan on her tour of Asia. China said it “will not sit idly by” and threatened “drastic action” if Pelosi did land in the country.

Liu shared his thoughts on a possible Chinese invasion in an interview Fareed Zakaria of CNN. He said that, as with all wars, “there will be no winners” if such a conflict does occur and China, Taiwan and the West lose. Liu added that the scenario would have implications beyond the semiconductor industry, leading to “the destruction of the rules-based world order.”

In June, a senior government economist said China should seize TSMC if the West ever imposes sanctions on the country like those faced by Russia. Taking over TSMC by force would be impossible, Liu said, given the company’s many moving parts and its reliance on third-party support. “[T]These are such complex manufacturing facilities, they depend on real-time communication with the outside world…from materials to chemicals, spare parts, engineering software and diagnostics,” the chairman explained.

Commerce Secretary Gina Raimondo recently warned that the US could face a deep recession if it was ever cut off from Taiwan’s chip manufacturing industry, which is one of the factors behind the passage of the Chip Law.

China also relies on TSMC chips, and Liu believes the country will face major economic disruption if supplies of its most advanced components disappear. Analysts say China’s fear of what Taiwan’s devastated chip industry could do to its economy is a major deterrent against any invasion plans – the so-called silicon shield. “If they [China] we are needed, that’s not bad,” Liu added.

Liu concluded by saying that China, Taiwan and the West need to think about how to avoid war in the region and ensure that the engine of the global economy continues to run.

According to the latest reports, the US Air Force plane carrying Pelosi to Malaysia took off from Kuala Lumpur. While it’s not clear if she’s on the plane, the US Navy deployed four warships to the east of Taiwan at the same time, suggesting a House Speaker’s visit could take place today.

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