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As known by RealityChek regulars, I’m really worried about the threat of a Chinese takeover (militarily or political) of Taiwan. That’s overwhelmingly because the island is home to the world’s leader in producing cutting-edge computer chips (Taiwan Semiconductor Manufacturing Company, or TSMC), and these devices will be the brains of future cutting-edge militaty systems and thus vital to U.S. national security as far into the future as anyone can see.

Sure, U.S.-owned companies like Qualcomm, Apple, and Nvidia still design lots of the world’s most advanced semiconductors. But they don’t produce them, and if you can’t manufacture these items (and no U.S.-owned firms can achieve this goal either at their domestic or foreign factories), you have nothing to actually stick into your missile defenses and jet fighters and radar arrays and communications networks.

It turns out, however, that I didn’t know the half of it about Taiwan’s electronics industry and America’s safety and independence vis-a-vis China. As made clear in this report today in The Diplomat, these Taiwanese companies – all located thousands of miles from the United States but only 100 miles from the People’s Republic – are major players in a wide range of both semiconductors and related electronics components that are used in advanced weapons and military systems right now, and that are certain to be keys to their successors.

Even concerning products for which the Pentagon has done a reasonable job helping to maintain adequate U.S.-based output, Chinese control of Taiwan would result in Chinese access to Taiwanese counterparts that are at least as effective – and whose manufacturers in fact perform some of the production for some of the American-owned firms concerned.

Just as bad: “Reasonable job” is a good description of Washington’s performance in terms of ensuring enough manufacturing of these sophisticated electronics during peacetime. But as Diplomat author Eric Lee observes, war-time or the run-up to a conflict could be a different story altogether. Therefore, the reliance on Taiwanese output for any needed surge production a potentially “vulnerable chokepoint for American forces.”

Nor is the situation likely to improve anytime soon, even if Congress does get off its duff and finally pass an acceptable version of legislation aimed at incentivizing much more advanced semiconductor manufacturing at home. For the necessary factories (known as “fabs”) cost billions of dollars and take years to construct. Indeed, as Lee notes, their price tag for one that’s state-of-the-art is about the same as for one of America’s biggest aircraft carriers. Further, as he points out, however much the U.S. government may be willing to provide semiconductor makers with subsidies of various kinds, TSMC by itself will be spending much more. So it’s likely to remain superior in the production of the most powerful chips.

Lee advances an intriguing idea for at least improving the situation – creating a “U.S.-Taiwan Senior Level Steering Group for Supply Chain Security and Defense Industrial Cooperation.” Its mission: more closely coordinating and integrate U.S. and Taiwan defense and technology sectors in order to jointly develop and produce the defense systems of the future and their most valuable components.

At the same time, this step would create its own risks. For China views Taiwan not simply as an asset it would very much like to possess. It’s seen as a renegade province that must be bought back under Beijing’s rule, not according to any particular schedule to be sure, but by force if necessary. That’s largely why the United States has shied away from officially recognizing the island as an independent country, let alone forming an alliance. As a result, how could the cooperative venture Lee proposes be formed without establishing such a relationship? And even if Washington threaded this needle in its own mind, would the Chinese recognize view the difference as meaningful, and simply accept the new status quo? Or would they conclude that a red line had been crossed and attack?

No one can outside Chinese leadership circles can say for sure. And maybe El Supremo Xi Jinping doesn’t yet know himself. What is completely clear, though, is that U.S. failure to maintain leadership in one of the most important industries of the future yet developed has left Washington – and the American public whose interests it’s supposed to safeguard – with only lousy and dangerous policy alternatives, and slightly less lousy and dangerous altenatives.

P.S. In the interests of full disclosure, you should be aware that I hold a not-trivial long position in TSMC stock. And thanks to friend and electronics manufacturing specialist Chris Peters for flagging this Diplomat article for me.