Taiwan Reasons Why It Is Futile For US And China To Harm TSMC

Chen Ming-tong, director-general of Taiwan's National Security Bureau, deemed it useless to take over facilities from Taiwan Semiconductor Manufacturing Company Ltd TSM if Beijing took control of the island. 

TSMC is highly integrated with the global supply chain, including suppliers like ASML Holding N.V. ASML, enabling the U.S. and other countries to stop their production without getting rid of their plants, Bloomberg quoted Ming-tong.

His statements were in response to U.S.'s stepping up contingency planning for a potential assault on Taiwan after Russia invaded Ukraine.

Ming-tong emphasized TSMC's need to integrate global elements before producing high-end chips. He said that without components or equipment like ASML's lithography equipment and any key components, TSMC could not continue its production.

The war gaming remains purely speculative but has included considerations to evacuate TSMC's chip engineers in the event of a Chinese invasion.

Some former U.S. officials have even advocated clarifying to China that it would destroy TSMC facilities to prevent Taiwan's critical chip production plants from falling into Beijing's hands.

Ming-tong dismissed concerns about the U.S.'s taking over TSMC or attracting its semiconductor engineers as he expressed its supremacy over Intel Corp INTC and Samsung Electronics Co, Ltd SSNLF.

Tensions in Taiwan have renewed fears of a Chinese takeover fuelled by the latter's military exercises around Taiwan in response to U.S. diplomat Nancy Pelosi's August trip. Taiwan pledged to work with the U.S. and its allies to prevent China's military from acquiring its advanced chip technologies.

In September, the U.S. agreed to intervene militarily to defend Taiwan from a Chinese attack amid escalating tension in Taiwan. The U.S. estimated that the loss of TSMC in a Chinese invasion of Taiwan could cost the world economy over $1 trillion.

 Price Action: TSM shares traded higher by 0.79% at $63.95 in the premarket on the last check Wednesday.

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