However, the American expansion will only account for 5–7 percent of TSMC's total output, according to industry analyst Ming-Chi Kuo.
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Chinese authorities [accused] the DPP of selling out to the West in exchange for support for independence.

And yet my first thought was that this was a move by the US to obtain Taiwan’s best-in-world fabrication technology in case China goes through with an invasion in the next few years. So really China should be happy about this!

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Depends on whether their ambitions concerning Taiwan are more about Taiwan itself or interrupting western chip dominance/production. I think without the second part, invading and occupying Taiwan would be more of a negative than a positive for China.

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I wish I could parse news coming out of China and tell which parts are jingoistic propaganda and which are actual news. They’ve leaned heavily on the narrative of Taiwan being a part of China and any invasion being necessary to bring them back into the fold, which is… honestly kind of terrifying. Invading for nationalistic reasons means it could happen even if it makes no sense and harms both parties more than either gains. See Ukraine for how that could shake out, except Taiwan is better defended and their allies have even more reasons to support them.

As for the chip side of things, it’s an open secret that Taiwan has their fabrication plants rigged to blow so the mainland can’t get their hands on them. A modern fab requires several years, multiple billions of dollars, and some extremely niche, cutting edge technologies and construction processes to build, and any damage renders them useless. There’s no credible way China obtains the fabs intact short of a coup or immediate surrender, or infiltration and sabotage on a level that they’d be making spy movies about it for decades to come.

Invading would cripple global chip production (TSMC produces roughly half the global supply, and more importantly the vast majority of high-end, nanometer-scale chips used by computers), crater Taiwan’s economy (along with everyone else’s, as microchips are the lifeblood of the Information Age), alienate the world (possibly leading to a major conflict), and accomplish nothing beyond a feather in the CCCP’s hat.

China has been building their own fabrication plants but they are still decades behind in the precision race, and I doubt they can meet even their own needs yet. Even if they press-ganged Taiwanese experts to restart their industry it’d take decades to bear fruit, if ever. Invading Taiwan would harm then just as much as it would the rest of the world.

And the worst part is an invasion seems to be a credible prediction.

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