News "We Must Seize TSMC" Urges Senior Chinese Economist

[2+2]

So, the opinions of one "chief economist at the government-run China Center for International Economic Exchanges" suddenly means China's CCP wants to takeover TSMC and/or Taiwan.

That's quite a claim and I don't think it's appropriate to jump to such a conclusion.

Now, if there was incontrovertible proof from within China's military or CCP members, this would be acceptable. Otherwise, this reads as an alarmist-piece based on one person's opinions.

If you have been paying attention, China has repeatedly said they want Taiwan.

This economist is telegraphing a strategic move and reason for it.
Anyone familiar with China and Taiwan know this is not alarmists.
Taiwan has been trying to prepare for an invasion.
The US military has done a 200 page report on a war between them.

We should be very concerned, this would be a world wide war,
but mostly economic, which is China's best bet to become world leader
because they know they can't win a military war.

 

[2+2]

China waited and watched as the world took a hands-off "too big to fight" approach with Russia. They realize they're also "too big to fight". They'll take Taiwan back within 5 years.

I sure hope TSMC has some sort of fail-safe that destroys all customer data upon such a scenario. Otherwise everyone that has orders in at TSMC just handed over all their proprietary technology to the Chinese government. That's why we don't send advanced technologies to our Chinese factory. At any point the CCP can just decide "this fab is mine now" and there's no fight to be had. We built the facility with this already in mind from the start.

Similar to what they did with the ARM branch over there. The government used their corporate access into ARM's systems to completely copy every single shred of IP they could.

Indeed, Russia attacking Ukraine was a test of the West's resolve and whether we would get involved militarily. They learned we would use sanctions that hurt us more than Russia.

My prediction is that China will make a move within a year, while the President Biden which is weak and compromised to China is still president. Also, for maximum threat, they need to do this before a significant number of fabs come online outside of the Pacific.

 

[2+2]

China's own advanced node initiatives are still well behind what Intel/Samsung/GloFo/and TSMC. But we all know the most advanced nodes for the worlds most advanced products come from TSMC. The objective here is to give clear access to technology China lacks and could freely export to other friendly nations like Russia. But also to hold the world hostage, in much the same manner we are influencing Oligarchs by seizing their boats. If you cripple enough companies, they would hope to have enough influence end such sanctions. But China forgets a number of critical stages to chip manufacturing depend on world involvement like noble gases.

For this strategy to be effective for China, they have to do it BEFORE TSMC builds fabs in other parts of the worlds like USA. But if I were TSMC, I would personally sabotage the plant if China tried to take over. It would be a pyric victory at best. If China knows ahead a time that a majority of Taiwan's value will be lost in an invasion, they may think twice.

But invasion will not be China's strategy. They are likely planning a blockade with a massive naval fleet backed with anti shipping warfare. Thus the plan is based on starving Taiwan into submission, thus not requiring them to fire a shot, and reducing world outcry. It's the most logical conclusion based on massive military spending on the navy and anti ship missile systems.

I like your first post analysis. The US military has put out a 200 page analysis and said a blockade is most likely method for China to take Taiwan.

Your post is close, but misses a couple of points.

1. The Chinese economist is telegraphing a strategy.
2. China's strategy is to take Taiwan.
3. Taiwan is part of a larger strategy to rule the world, be number one.
4. Computer chips are the most important strategic piece of current life.

You are correct that there would be a trade war/sanctions if China takes Taiwan. They are trying to get the West to consider how bad this would be. It would stop production in the West of pretty much everything with electronics in it. China would still be able to make lower tech items.

China wants us to realize while both would suffer, the West would be destroyed Economically, they would suffer less.

The goal is to get us used to their plan and convince a weak president to surrender,
let them get away with taking Taiwan, in exchange, Apple can still sell phones. Our economies are saved, but at their mercy.

 

[HonkingAntelope]

A lot of folks in the West are still waking up to the fact that the universe does not revolve around the US and EU. The pandemic made it all too clear that the decades of globalization and the dismantling of domestic manufacturing made the west incapable of producing even national security essentials like basic medications or medical supplies and PPE.

It's a safe bet that China is taking notes on how the situation in Ukraine is playing out. Ignoring all the propaganda, you can bet Western leaders are getting nervous by now. Russia is still making very slow gains in Ukraine, and the anti-Russian sanctions are beginning to cause as much pain at home as they were meant to inflict on the Russian people.

The push hasn't come to shove yet, but if China does make a move on Taiwan and gets hit with sanctions, what will US and Europe do if China retaliates with immediate hard block on ALL outgoing shipments to the West?

 

[digitalgriffin]

Indeed, Russia attacking Ukraine was a test of the West's resolve and whether we would get involved militarily. They learned we would use sanctions that hurt us more than Russia.

My prediction is that China will make a move within a year, while the President Biden which is weak and compromised to China is still president. Also, for maximum threat, they need to do this before a significant number of fabs come online outside of the Pacific.

I look at it this way: "Get the cavity removed today, or the root canal tomorrow." Yes it's painful, but we got there by not taking care of ourselves. So pay for it now, or pay for it later. That said Russia is certainly suffering. Economic signs take time to take effect. The signs are starting to show for Russia. The main issue is lack of wheat and oil/gas import changes.

I agree with your limited timeframe. China has to act BEFORE a number of fabs are built outside the Pacific.

There are tons of people who hate the US's position. And you know what I'm okay with that. Those are the view of prideful nationalist who think the world is ruled by one power. It's not any more. That's their problem and their view. If they are going to hate, they are going to hate. If they want to suffer, then so be it. Maybe someday they will learn.

 

[Alpha_Lyrae]

If you have been paying attention, China has repeatedly said they want Taiwan.

This economist is telegraphing a strategic move and reason for it.
Anyone familiar with China and Taiwan know this is not alarmists.
Taiwan has been trying to prepare for an invasion.
The US military has done a 200 page report on a war between them.

We should be very concerned, this would be a world wide war,
but mostly economic, which is China's best bet to become world leader
because they know they can't win a military war.

No, China already considers Taiwan as an independently governed Chinese territory. They already "claim" it, ideologically. Obviously, Taiwan doesn't consider itself part of China.

There also wouldn't be a war. China would simply blockade until they decide to invade, which would crash the global economy, as TSMC supplies a large portion of chip shipments. Samsung and Intel wouldn't be able to make up for the extreme loss in capacity and leading-edge performance. The world relies on chips, and many are also assembled in China after leaving Taiwan.

This would undoubtedly hurt China more, as electronics and silicon would move away from the area at an astonishing pace; governments would heavily subsidize local fab construction to accelerate local manufacturing of silicon. Sanctions would also prevent corporations from conducting any business with China.

ASML EUV machines are also needed for leading-edge nodes. They're Dutch and wouldn't supply a Chinese TSMC.

Honestly, the US market relies too much on goods produced in China.

 

[escksu]

I look at it this way: "Get the cavity removed today, or the root canal tomorrow." Yes it's painful, but we got there by not taking care of ourselves. So pay for it now, or pay for it later. That said Russia is certainly suffering. Economic signs take time to take effect. The signs are starting to show for Russia. The main issue is lack of wheat and oil/gas import changes.

You now have to look at it another way. What the news don't tell you is the sheer amount of raw materials or commodities that Russia exports to the rest of the world.

Oil and gas is just one of them. Nickel, noble gas etc etc.. way more than simply just wheat/oil/gas.

Commodities isn't something that you can buy off the shelves from supermarkets. It not something that can be produced in factories, you can't simply rmp up commodities production. You need to source for new mines/wells etc and build necessary infrastructure to mine, transport and refine them.

 

[digitalgriffin]

You now have to look at it another way. What the news don't tell you is the sheer amount of raw materials or commodities that Russia exports to the rest of the world.

Oil and gas is just one of them. Nickel, noble gas etc etc.. way more than simply just wheat/oil/gas.

Commodities isn't something that you can buy off the shelves from supermarkets. It not something that can be produced in factories, you can't simply rmp up commodities production. You need to source for new mines/wells etc and build necessary infrastructure to mine, transport and refine them.

slaps forehead Good grief, I forgot about Nickle. A significant amount of Noble gases came from Ukraine. But as Tom's themselves noted, they are produced in other countries. They are a side product of nuclear energy production on their older nuclear stacks. That said it isn't that we aren't capable of producing these materials. We do have the ability. As you noted, they will just take years to ramp up and will cost twice as much due to environmental regulations and higher labor cost. But again, I'm okay with that.

 

[escksu]

slaps forehead Good grief, I forgot about Nickle. A significant amount of Noble gases came from Ukraine. But as Tom's themselves noted, they are produced in other countries. They are a side product of nuclear energy production on their older nuclear stacks. That said it isn't that we aren't capable of producing these materials. We do have the ability. As you noted, they will just take years to ramp up and will cost twice as much due to environmental regulations and higher labor cost. But again, I'm okay with that.

The keyword, 'take years to ramp up'......

So, its not so much about production capability, its time needed.... So what are you going to do between now and years later? This is the real problem we are facing.

 

[digitalgriffin]

The keyword, 'take years to ramp up'......

So, its not so much about production capability, its time needed.... So what are you going to do between now and years later? This is the real problem we are facing.

I'm not disagreeing. The entire world will hurt as they realign their economies.

But this is the same problem both China and Russia are facing. And at the end of that restructuring we will have a largely tri economic world. Old communist dependent block (China, Russia, Belarus, then neutral countries (ie: India), and finally free western aligned countries. Sanctions on Russia are taking hold at 20% inflation. And China is starting to collapse under the weight of their housing scandals'.

Eventually manufacturing will shift to India, Vietnam, Japan, Korea which are more than willing to take their business. If TSMC are smart they will sabotage their Taiwan plant and make it useless and then outsource to their biggest customers host countries. It's a win-win. They get some sweet deals from governments in the name of national security. And reducing the their strategic value to China makes them a less tempting target. And Germany and USA are doing just this. They should be up and operating in 3 years.