The rhetoric of microchips: why Xi Jinping will not risk an invasion of Taiwan | World News

The conflict between China and Taiwan is a double-edged sword.

Chinese President Xi Jinping. (Photo source: AFP)

New Delhi: The West has pumped billions of dollars of weapons into Taiwan to prevent a possible invasion of the island by Chinese President Xi Jinping. China says Taiwan is a renegade province and US intelligence sources believe Xi could invade it as soon as 2027. And now comes a report that TSMC and ASML, the world's largest chipmakers, will deactivate their manufacturing equipment of fleas if China were to invade.

The chairman of TSMC earlier said that no one can control TSMC by force and that in the event of a military invasion, the factory would be rendered non-operational.

These reports are only technological solutions as part of non-kinetic measures for future conflict. This is part of the new chip war and is not a new phenomenon, said Anurag Awasthi, vice-president of the Electronics and Semiconductors Association of India, while speaking to the Editor-in-Chief of News9 Plus, Sandeep Unnithan, on The News9 Plus Show.

Data is the new oil

Awasthi cited examples from history. Let's go back to the summer of 1941. During Operation Barbarossa, when the Russians were being invaded by Nazi Germany, the entire Russian defense establishment moved east to the Urals.

When the Allies entered Kuwait (1990-91 Persian Gulf War), Saddam Hussein's forces retreated into Iraq, setting fire to almost all the oil wells, he added.

During Operation Desert Storm, with the liberation of Kuwait and the destruction of the Iraqi army, Hussein did not admit defeat. Before making his final exit, he decided to deliver the final blow. He ordered his men to blow up Kuwait's oil wells. Some 700 wells were burned. The fire cost Kuwait $1.5 billion.

Data is the new oil. Taiwan is the chip foundry of the world. But is it that easy to shut down operations in a factory?

The anti-rhetoric

Taiwan produces 90% of the world's 5nm chips. ASML has the monopoly on extreme UV machines in the world. The argument is not why the company remotely turns off these machines in Taiwan, during a conflict. But this is why ASML does not plan to turn off these machines in China itself?

There are also some machines in China. So, the anti-rhetoric is this: why focus only on Taiwan, and not China? EUV machines are not very small entities. They are as big as a city bus. They require regular maintenance, upkeep and updates. It is therefore possible to deactivate them remotely. But turning on that proverbial circuit breaker might be counterproductive, Awasthi said.

There's a simple reason why this is a double-edged sword. Because once you flip that switch, it becomes useless, he added.

ASML is the most valuable technology stock in Europe with a market capitalization of $370 billion. It also has an EUV technical training center in Taiwan itself.

The impact

Last year, fear of an invasion in Taiwan disrupted the supply of motor vehicles to India. That's the scale of disruption we could face if something happens, experts say.

This is one of the reasons why US President Joe Biden is initiating a change in the supply chain by pledging $39 billion for microchip manufacturing on US soil.

Is conflict suitable for China?

It is not very easy to enter into an invasion dynamic with Taiwan. It's not coastal. This requires a war in three or perhaps four dimensions as far as Taiwan is concerned, Awasthi said.

The question is: will there be a conflict between China and Taiwan? Does this suit Xi Jinping? China is Taiwan's largest trading partner. There are trade exchanges as well as investments by the Taiwanese within the Chinese mainland. Does this bode well for conflict?

Then there is Taiwan's Double Ring of Fire. China's looming threat to invade Taiwan and its location along the Ring of Fire, a group of volcanoes and earthquake sites, constitute the deadly double Ring of Fire. More than 2,000 earthquakes strike the island every year.

An invasion is not easy when it comes to executing operations. And with so much money and trade at stake between the two countries, I think common sense and sensitivity will not make this a full-fledged conflict, he concluded.