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Taiwan trepidation

It’s been over a year since you covered the rise and rise of TSMC, and its strategic impor tance to the world in terms of chip production. With a new Taiwanese president in place who has been labeled a “troublemaker” by China, do you think there’s any danger of the global chip supply being majorly disrupted in the coming years?

Also, what do you think of tech companies like Intel who are slowly moving chip manufacturing to America? Do you think that’s ever going to realistically work?

–R. Daltry

JEREMY LAIRD RESPONDS: Firstly, anything can happen, but the question is what is probable. China's supreme leader, Xi Jinping, is no fool. He knows that any attempt to take Taiwan by force will mean the end of the island nation's chip foundr y industr y.

TSMC's chip manufacturing plants are unimaginably complex and fragile, you see. A tiny speck of dust in the air can have them shutting down, let alone damage from munitions. They also need an army of ultraskilled staff, so the bottom line is this: if China takes Taiwan by militar y force, it's unimaginable that this could be achieved without catastrophically disrupting TSMC (and other foundries in Taiwan).

Best case scenario, it would take five years to recover. More likely, in the event of a brain drain, it could take a decade or more to get those fabs back to where they are now: leading the world. And that's assuming China could get hold of new lithography machines from ASML, which has a monopoly on the most advanced equipment. The problem is that the US has already banned China from buying ASML's machines, so it hardly seems likely that conflict in Taiwan would have the US reverse that position.