In case China invades Taiwan, ASML and TSMC have a plan

An invasion of Taiwan by China is a hypothetical that we have discussed a few times over the years. One of the big concerns if not the biggest is that in such an event, China would seek to take control of TSMC, the world’s largest chip foundry and the company responsible for the manufacturing of every single Apple-designed chip. Overall, TSMC builds 92% of the cutting-edge chips used in the U.S.

A Chinese take over of TSMC would devastate the U.S. economy

Dutch company ASML is the only manufacturer of extreme ultraviolet lithography machines in the world

ASML can remotely disable an EUV Lithography machine would would cripple TSMC’s operations

ASML has had talks with the Dutch government and told officials that it can disable its lithography machines remotely. The Netherlands has also run simulations of a Chinese invasion of Taiwan to understand the risks.

Speaking on condition of anonymity, the aforementioned sources said that ASML, as part of a regular update, can remotely activate a kill-switch. Activating such a switch would be one of the ways that TSMC would make itself non-operable in the event of a Chinese invasion of Taiwan. TSMC Chairman Mark Liu told CNN in September, “Nobody can control TSMC by force. If there is a military invasion you will render TSMC factory non-operable.”

China seeks to become self-sufficient when it comes to chips which is why U.S. officials were upset when SMIC was able to build the Kirin 9000s 5G application processor for the Huawei Mate 60 series This was the first 5G chip that Huawei had access to since 2020 when the U.S. changed an export rule to prevent Huawei from obtaining cutting-edge chips.

Chinese President Xi Jinping has considered Taiwan to be a territory of China and has refused to rule out an invasion. A U.S. admiral testified a couple of months ago that China is working to get its military in shape for an invasion of Taiwan by 2027.