Will the U.S. and China go to War for TSMC?

The semiconductor industry has never been more exciting than it is today and that is a mouthful given what we have accomplished over the last 50 years. From mainframe computers to a supercomputer in our pockets or on our wrists. Even if you don’t believe in miracles, semiconductor technology comes really close, absolutely.

U.S. tightens exports to China’s chipmaker SMIC, citing risk of military use REUTERS

When I started my career 36 years ago you would be hard pressed to find a person who had heard of a semiconductor much less knew what one really was. Today, it is still hard to find people who really know semiconductor design and manufacture (especially in the media) even though you can read about it every day, especially now that semiconductors could lead to the next world war.

Before you write me off as another click-baiting-chicken-little think about how important semiconductors are to modern life. Not just important, semiconductors are critical to modern life. Not just critical, semiconductors could mean the difference between life and death.

Disagree? Imagine our world without electronic devices. Imagine a business or hospital without digital equipment. Imagine a military without high tech gear. Are you getting the picture? Life or death.

Now understand that semiconductors are where modern electronics begin and end for that matter. Also understand that the semiconductor chip may have been invented in the United States but today it is a worldwide supply chain.

To be clear, no one country can succeed in semiconductor design and manufacture without others. Having grown up in Silicon Valley and spending the majority of my semiconductor professional life traveling the world I know this firsthand, front row seat, I lived it.

Being from a military family and a military history enthusiast I also know a little bit about war. My grandfather served in WWI as an Army medic and lived to tell about. In fact, he lived 102 years under my care so I heard all about it. My other Grandfather was at Pearl Harbor, my father served in Korea, and my Uncle in Vietnam. War is hell.

One of the strategic things to do when waging a war is to cut off their supply lines, right? Food, water, fuel, raw materials, etc… You can now add semiconductors to that supply list.

So why is the United States today cutting off the semiconductor supply line to China? It’s an act of war and if there is an actual war over semiconductors, where will it be fought?

Taiwan of course. Taiwan is the semiconductor manufacturing hub of the world. Taiwan is also the Republic of China, which is what my passport says, and even without semiconductors China wants political control over Taiwan. Something like what is happening in Hong Kong only with a full-on war declared.

Why is Taiwan so important to the semiconductor supply chain? Because Taiwan is the home of TSMC (Taiwan Semiconductor Corporation), the worldwide champion of semiconductor manufacturing. My first book “Fabless: The Transformation of the Semiconductor Industry” goes into more detail on how TSMC came about but the bottom line is; It’s all about the ecosystem (supply chain). Hundreds of companies around the world brought us to where we are today and nothing short of a war can stop the semiconductor ecosystem from succeeding.

Could it even be possible? China at war with the US through Taiwan? Ten years ago from the Lobby of Hotel Royal in Hsinchu I would have said absolutely not. Today, sheltering in Silicon Valley, given the current political instability and oncoming economic challenges, given the eye-for-an-eye +1 behavior of the US and China leadership, I say war is probable. Unless of course the world recognizes semiconductors as a matter of life or death and gets civilized around it. Just my semiconductor professional opinion of course.