The escalation of tensions between China and the United States prompted a very serious comment from Chen Wenling, chief economist at the state-owned China Center for International Economic Exchanges, who made it clear that if his country is hit by a round of sanctions “serious” economic and commercial interests should take control of Taiwan and TSMC. For us to understand, this is equivalent to propose a coup.
It is clear to many that Chen’s words were just that, words, an absurd attempt to generate unnecessary fear at the least opportune moment, and that is that an armed intervention in Taiwan would not only be bad for the world, it would also be terrible for China, a reality that the president of TSMC, Mark Liu, has confirmed by saying that such a war will have no winners, only losers, and that the consequences would be terrible for the world in general.
The executive has also commented that no one could control TSMC by force, not even China, and that an invasion of Taiwan would end up rendering the semiconductor factories inoperative. According to Liu, these factories use very sophisticated equipment and rely on a real-time connection to the outside world which includes such important aspects as materials, chemicals, available parts, engineering, software and diagnostic processes. A war would prevent its normal functioning.
The most important thing to keep in mind in all of this is that China also depends on TSMC to get the semiconductors it needs, and that a war against Taiwan for control of TSMC would leave the country and its major companies without access to the world’s most advanced semiconductors. Yes, China could turn to SMIC, but this company is far from the Taiwanese level.
Mark Liu is very clear, China needs TSMC, but a TSMC that works and remains in its current state. The war is not in China’s interest, but we must bear in mind that the Asian giant also has its limits, and that it might not be willing to accept certain pressures and measures from the United States, not only as a matter of pride, but also for show no weakness to the world. We will see how the situation evolves, but barring disaster I think it is very unlikely that we will end up seeing a war in Taiwan.
