Trump Threatens Taiwan On Chips
So I came across this a few days ago
TAIPEI (Taiwan News) — In a Fox News interview aired on Sunday (July 16), former U.S. President Donald Trump declined to answer whether as president he would defend Taiwan against China, and he accused Taiwan of stealing the U.S. semiconductor business and said Washington should have imposed tariffs on Taiwan chip companies.
https://www.taiwannews.com.tw/en/news/4947134
Reminds me of a famous Kissinger Quote:
To be the US' enemy is dangerous, to be the US' friend is fatal.
Trump wooed Taiwan with promises of support for Taiwan independence helping to ratchet tensions between China and Taiwan. During his 4 years as President he said little about Taiwans chips beyond asking TSMC not to send certain chips to China and asking them to set up some manufacturing in US.
While in office besides allowing US Oil Refineries to Close due to his Pandemic measures without an offer to assist them to stay open, he also allowed US last advanced chipmaker to close its doors due to it was unable to compete with TSMC.
Global Foundries
2007-Five years after Sanders retired from AMD, the company announced it was dividing its chip design and fabrication businesses. Wall Street cheered, reckoning the new AMD would be more profitable without the capital-intensive fabs. AMD spun out these facilities into a new company that would operate as a foundry like TSMC,
The investment arm of the Abu Dhabi government, Mubadala, became the primary investor in the new foundry, an unexpected position for a country known more for hydrocarbons than for high-tech.
GlobalFoundries, as this new company that inherited AMD’s fabs. When GlobalFoundries was established as an independent company in 2009, industry analysts thought it was well placed to win market share amid this race toward 3D transistors. Even TSMC was worried, the company’s former executives admit. GlobalFoundries had inherited a massive fab in Germany and was building a new, cutting-edge facility in New York.
2015, GlobalFoundries was by far the biggest foundry in the United States and one of the largest in the world, but it was still a minnow compared to TSMC. GlobalFoundries competed with Taiwan’s UMC for status as the world’s second-largest foundry, with each company having about 10 percent of the foundry marketplace. However, TSMC had over 50 percent of the world’s foundry market.
Measured by thousands of wafers per month, the industry standard, TSMC had a capacity of 1.8 million while Samsung had 2.5 million. GlobalFoundries had only 700,000.
2018, GlobalFoundries had purchased several EUV lithography tools and was installing them in its most advanced facility, Fab 8, when the company’s executives ordered them to halt work. The EUV program was being canceled. GlobalFoundries was giving up production of new, cutting-edge nodes. It wouldn’t pursue a 7nm process based on EUV lithography, which had already cost $1.5 billion in development and would have required a comparable amount of additional spending to bring online.
Even the deep pockets of the Persian Gulf royals who owned GlobalFoundries weren’t deep enough. The number of companies capable of fabricating leading-edge logic chips fell from four to three.
Maybe because Trump had plans to dupe Taiwan with sweet talking them into nudging TSMC to set up a manufacturing plant in Arizona where its employees may be picked off by US chip makers with higher salaries and technology theft becomes more achievable
Now years later, after Biden continued wooing Taiwan with offers of support against China, poking the bear with high level official visits and arms deals and even increasingly its covert military presence on Taiwan, he managed to get the Chip Act passed which will give US chip makers $50 billion in which to make chips that will compete with TSMC
I said at the time watch out Taiwan, you are a prized poodle today for your American Masters, but once you become dependent on the US to protect you from the Big Angry Bear across the Taiwan Strait, which they , you will become vulnerable to their trade demands. Soon you will become a strategic competitor and you will be treated like China.
The founder of TSMC is on record as saying how nobody making chips in US can compete with TSMC on Taiwan in price. So the only solution to that is to increase the price of chips. This requires eliminating the competition, either through high tariffs (which end up being paid by the American consumer), or goading China into a war over Taiwan and thus destroying TSMC on Taiwan.
Oh well, some people never learn
Going back to the article
Bartiromo added that because Taiwan produces such a high percentage of semiconductors, if China captured the country it would be able to "turn the world on and off." Trump agreed that China would be able to "turn the world off, potentially,….
There are a couple of problems with this. First off, TSMC would be unlikely to survive should China seek control of Taiwan by force. Taiwan or the US would make sure of that.
Second, only one company can potentially turn the worlds chips off, and that company is Dutch which provides the tools advanced chipmakers require.
2001, ASML bought SVG, America’s last major lithography firm. SVG already lagged far behind industry leaders, but again questions were raised about whether the deal suited America’s security interests.
Inside DARPA and the Defense Department, which had funded the lithography industry for decades, some officials opposed the sale. Congress raised concerns, too, with three senators writing President George W. Bush that “ASML will wind up with all of the U.S. government’s EUV technology.”
Intel and other big chipmakers argued that the sale of SVG to ASML was crucial to developing EUV—and thus fundamental to the future of computing. “Without the merger,” Intel’s new CEO Craig Barrett argued in 2001, “the development path to the new tools in the U.S. will be delayed.” With the Cold War over, the Bush administration, which had just taken power, wanted to loosen technology export controls on all goods except those with direct military applications.
The administration described the strategy as “building high walls around technologies of the highest sensitivity.” EUV didn’t make the list. The next-generation EUV lithography tools would therefore be mostly assembled abroad, though some components continued to be built in a facility in Connecticut.
The manufacturing of EUV wasn’t globalized, it was monopolized. A single supply chain managed by a single company would control the future of lithography.
2012, years before ASML had produced a functional EUV tool, Intel, Samsung, and TSMC had each invested directly in ASML to ensure the company had the funding needed to continue developing EUV tools that their future chipmaking capabilities would require. Intel alone invested $4 billion in ASML in 2012, one of the highest-stakes bets the company ever made,
ASML had set a target for each component to last on average for at least thirty thousand hours—around four years—before needing repair. In practice, repairs would be needed more often, because not every part breaks at the same time. EUV machines cost over $100 million each, so every hour one is offline costs chipmakers thousands of dollars in lost production.
That a Dutch company, ASML, had commercialized a technology pioneered in America’s National Labs and largely funded by Intel would undoubtedly have rankled America’s economic nationalists, had any been aware of the history of lithography or of EUV technology. Yet ASML’s EUV tools weren’t really Dutch, though they were largely assembled in the Netherlands. Crucial components came from Cymer in California and Zeiss and Trumpf in Germany. And even these German firms relied on critical pieces of U.S.-produced equipment. The point is that, rather than a single country being able to claim pride of ownership regarding these miraculous tools, they are the product of many countries. A tool with hundreds of thousands of parts has many fathers.
While I am on the subject of Taiwan I will discuss this article which says China would not blockade Taiwan for 2 reasons
https://www.taipeitimes.com/News/taiwan/archives/2023/07/10/2003802966
US navy would escort supply ships to Taiwan
It would give the West too much time to mobilize, thus preventing any hopes for victory
It goes on to say
Former US Department of Defense senior director for China, Taiwan and Mongolia Tony Hu (胡振東) said in a media interview that the perception that China could cause Taiwan to collapse by blockading it for three weeks did not reflect reality.
“First, they can’t blockade Taiwan for three weeks,” Hu said in response to a question of how coalition forces would react if Chinese warships and planes surrounded Taiwan to prevent foreign military assistance.
If China conducted a blockade without firing weapons it would still be an act of war under international law and “coalition forces could conduct anti-blockade operations by escorting supplies into Taiwan,” he said.
“China hopes to take Taiwan in a quick victory,” and “a blockade is not going to give them a quick victory,” Hu said.
“If China does a blockade, it would give coalition forces so much time to build up and to move forces forward that the chance of them ever winning a conflict with Taiwan would be nil,” he said.
First off, China would know full well that taking Taiwan by force would mean war with the US, much like Japan knew the same would happen by invading Philippines, Hong Kong and Singapore-Malaysia. Thats why Japan bombed Pearl Harbor first. War seemed inevitable anyways,
So any decision by China to blockade Taiwan would mean they have accepted that it will mean War with the US, Japan and Korea at a minimum, and more likely War with the entire West. Inevitably this means World War III with China and Russia playing the role of Japan and Germany in World War II
Unlike Germany and Japan , China and Russia are connected by land, and China and Russia combined have plenty of oil and food resources (unlike Germany and Japan) and their industrial production capacity exceeds that of the West.
Ok, so given that China would know War with the West is inevitable and decide to move and take Taiwan via blockade, does it pull a Pearl Harbor of its own? Possibly. I can see them taking out bases in Japan , Guam and Korea first
But then again, maybe not. They know doing so puts them in a worse light in terms of World Opinion and stirs up a hornets nest without gaining much. They still have interests in the Global South and Middle East.
Assuming they just did a blockade and announced any ship entering the Taiwan Strait and any planes arriving to Taiwan would be at risk. Insurance companies would cancel insurance of anyone shipping supplies to Taiwan. No more imports.
Unless the US is going to carry these supplies themselves, or will offer the insurance, there will be no supplies. And if they tried, China would most likely sink the ships and shoot down the cargo planes with their missiles. Taiwan after all is in Chinas backyard, and the US is thousands of miles away aside from their bases in Japan, Guam and Korea
Coming back to this point
If China does a blockade, it would give coalition forces so much time to build up and to move forces forward that the chance of them ever winning a conflict with Taiwan would be nil,”
I must ask, move the forces where? Japan, Korea, Philippines, Guam? Certainly not Taiwan, they wont be allowed anywhere near Taiwan. And with what weapons? According to Biden we don’t have much left.
We do have an impressive Navy but they are sitting ducks for Chinas missiles. This is not World War II. No doubt we also have plenty of long range missiles, nuclear and non-nuclear, but so do they.
As for Chinas desire for a short war, this is ridiculous. First of all, they have already waited 75 years. Second, by starting a war which is what a blockade will mean they know this will be long war, maybe even a Forever War. There will be no quick ending unless someone pulls the nuclear trigger
Unlike World War II which ended thanks to Soviets conquering and then occupying Germany with support from US and Britain, and the US doing the same with Japan after dropping atomic bombs on cities, such an ending is not possible for WWIII.
Neither side has the capacity to conquer the other. This does not rule out an extended ceasefire at some point, much like in Korea, but such an event is unlikely to occur unless Taiwan capitulates to whatever terms China sets
No matter how long the active part of the War lasts, it will be damaging to everyone, US, China, Taiwan, and the World.
The West, given its dependence on Chinese goods will be plunged into a great depression and living standards will plummet.
If nuclear weapons are not used, the number of lives lost will be limited. If the US resorts to attacking Chinese cities Taiwan probably gets reduced to rubble and China likely reciprocates with attacking US cities and one side or the other eventually resorts to the nuclear option. The same holds true with Russia and Europe
Personally, I don’t see the Chinese doing a blockade anytime soon. However, its probably being planned for as the US is giving every sign War is inevitable, and China has made clear what its Red Line is.
If the Red Line is crossed it will likely be over a build up of US troops or foreign mercenaries in Taiwan, or an outright declaration of independence (unlikely)
Hopefully wiser heads prevail on all sides
That said, it probably would be smart of Taiwan to stockpile food, fuel and medicines. Maybe they already have, but I don’t see a lot of talk about preparing for a blockade.
I have said many times China probably does not have the capability or will to invade. There is a reason the US did not invade Taiwan in WWII, its too tough to do given the geography. Losses would have been enormous.
With all the landing craft they would need any preparation for invasion could be detected quite easily by Satellite, so they wont have the element of surprise
To me all this hype seems to be about getting Taiwan people support to increase spending on US weapons and an attempt to colonize Taiwan, and to get American peoples support for more Military spending. Independence from China is great, but if it means being overly Dependent on the US , Taiwan will realize thats not going to be so wonderful.
Its also occurred to me that some of this is Fake Wrestling. Both the US and China have serious problems at home and may have partnered together in OPERATION COVID , which is the greatest Crime Against Humanity in history. Having an external enemy and threat of war is a great distraction that also gets support among the people for authoritarian measures.
End