Taiwan rejects proposal to blow up key facilities should China invade

Defence Secretary Lloyd Austin on defending Taiwan

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Taiwan has rejected a proposal to destroy its flagship semiconductor industry in the event of a Chinese invasion, the island’s security chief has said. His remarks came amid growing fears that Beijing may be emboldened to assume the territory after Russia’s invasion of Ukraine.

China has claimed Taiwan as part of its own territory since the state’s inception, and it has been long thought it may one day attempt to retake it by force.

Were it to do so successfully, it would gain access to Taiwan’s rich assets, including its manufacturing base for microchips.

Chen Ming-tong, director-general of Taiwan’s National Security Bureau, told local politicians today it would be effectively useless for China to take over the factories, which was why they did not need to be destroyed.

The Taiwan Semiconductor Manufacturing Company (TSMC) is said to be deeply integrated into the international supply chain, and so he said other nations would be able to choke production.

Mr Chen said: “If you understand the ecosystem of TSMC, the comments out there are unrealistic,”

“TSMC needs to integrate global elements before producing high-end chips. Without components or equipment […] without any key components, there is no way TSMC can continue its production.”

He added: “Even if China got a hold of the golden hen, it won’t be able to lay golden eggs.”

The security chief’s remarks came after politicians in Taiwan queried reports that US President Joe Biden was stepping up contingency plans for a potential invasion.

China and Taiwan have traded military exercises since US Speaker Nancy Pelosi travelled to the island in August.

The US has considered plans to evacuate chip engineers in the event of a Chinese invasion, according to Bloomberg, citing those familiar with the discussions.

It previously reported that some former US officials had advocated telling China it would destroy TSMC’s facilities if the island were to be occupied – though there are believed to be no current formal plans for this.

Taiwan is a self-governing democracy that became founded during the Chinese civil war. But Beijing claims it is a province under the rule of a separatist government.

Under its One China policy, Beijing only allows other nations to hold trade and diplomatic relations if they do not recognise Taiwan’s legitimacy.

The US, like other Western nations, has adopted a policy of strategic ambiguity towards Taiwan – not recognising its independence while also supporting it militarily.

However, Ms Pelosi’s recent trip there sparked outrage in China, more so than previous trips because of the ardently pro-Taiwanese rhetoric she employed while there.

Mr Chen dismissed concerns from local policymakers that the US may try to take over TSMC or poach staff, suggesting that it was in fact critical to large technology firms such as Intel and Samsung.

He said: “If they understood TSMC’s ecosystem better, they would realise that it’s not as simple as they think. That’s why Intel can’t catch up with TSMC.”

America’s National Security Council estimates that if China were to invade Taiwan, the loss to the global economy of TSMC alone would be over a trillion dollars.

The firm has already been affected by controls imposed by the Biden administration over what microchips and semiconductors can be exported to China; shares fell to a 28-year low yesterday following the announcement.

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