June 21th, 2024 | 6:11

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TSMC, faced with a Chinese invasion of Taiwan, plans to remotely deactivate chip manufacturing

Maria Jose Gonzalez

May 21, 2024 | 6:02 p.m.

The possibility of a Chinese invasion of Taiwan has raised significant concerns in the international community, especially regarding semiconductor production. Taiwan Semiconductor Manufacturing Co (TSMC) and its machinery supplier ASML have developed a plan to deal with this threat: remotely disabling their sophisticated chip-making machines in the event of an invasion. This measure seeks to ensure that critical technology does not fall into Chinese hands and protect global economic and technological security.

The technology behind the defense

TSMC, the world's largest semiconductor manufacturer, relies heavily on ASML's extreme ultraviolet (EUV) lithography machines. These machines, valued at more than €200 million each, use high-frequency light waves to print the smallest existing microchip transistors, crucial for artificial intelligence and military applications.

ASML, based in Veldhoven, Netherlands, is the only manufacturer of these machines in the world. Its technology has been the subject of government interventions aimed at preventing it from falling into the wrong hands. In fact, the Netherlands prohibits the sale of these machines to China due to US concerns about the competitive advantage they could provide in the global chip war.

Remote deactivation plan

Faced with the threat of a Chinese invasion, ASML and TSMC have implemented a remote deactivation system for their EUV machines. This “kill switch” can be activated remotely to disable machines in the event of a military emergency. This deactivation capability is part of the regular service and updates that ASML provides to its customers, ensuring that machinery does not operate without ASML intervention.

The importance of this system is crucial, given that around 90% of the world's most advanced chips are manufactured in Taiwan. The ability to disable these machines would protect TSMC and the global technology industry from potential disruptions caused by armed conflict.

Impact and international reactions

The international community has reacted with measures to counter the potential threat. The US Congress recently approved $8 billion in aid to strengthen Taiwan's defenses, and the Biden administration is boosting semiconductor production on American soil with $39 billion in subsidies to chipmakers.

Meanwhile, the European Union and other allies are also taking steps to diversify their sources of semiconductors and reduce their dependence on Asia. ASML, for its part, has suspended exports of its most advanced chip machines to China, aligning with restrictions imposed by the Netherlands government and requests from the United States.

The situation is particularly tense due to China's technological self-sufficiency efforts. Beijing has prioritized technological self-sufficiency, supporting efforts by Huawei and others to advance domestic chip design and manufacturing. However, restrictions and lack of access to the most advanced ASML technologies hinder these advances.

The future of TSMC and the semiconductor industry

TSMC Chairman Mark Liu has noted that any attempt to control TSMC by force would result in its factories being disabled. "No one can control TSMC by force," Liu said in an interview, highlighting the company's ability to disable its operations in the event of an invasion.

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