Taiwan’s semiconductor company, TSMC, is the world’s largest manufacturer of advanced chips and holds significant influence on the global economy. The United States and its allies have been keen on ensuring that TSMC’s manufacturing capabilities do not fall into the hands of the Chinese Communist Party (CCP). Reports have surfaced suggesting that in the event of a CCP invasion of Taiwan, Dutch chip equipment manufacturer ASML could potentially render TSMC’s “Extreme Ultraviolet Lithography Machine” (EUV) inoperable.
The EUV is considered the most advanced chip manufacturing equipment globally, with only ASML having the capacity to manufacture it.
According to a report by Bloomberg on May 21st, two sources revealed that given the majority of advanced semiconductors are manufactured in Taiwan, there have been concerns raised by US government officials to Dutch and Taiwanese officials about what would happen should an attack on Taiwan occur by the CCP.
Additionally, two other sources stated that when the Dutch government met with ASML regarding the aforementioned threat, the company assured Dutch officials of their ability to remotely disable these machines. The Netherlands has conducted simulations of a potential CCP invasion of Taiwan to better evaluate the risks involved.
The EUV machines, comparable in size to city buses, require regular maintenance and updates. Insiders indicated that as part of this, the company has the capability to remotely shut down the EUV machines, akin to a “kill switch” safety mechanism.
The report mentioned that remote shutdowns apply to ASML’s EUV series of machines, with TSMC being the largest single customer of the EUV technology.
Sources noted that EUV machines require frequent maintenance, and without backup parts from ASML, they would cease operation quickly.
ASML, TSMC, and the spokesperson for the Dutch Ministry of Trade declined to comment to Bloomberg. The spokespersons for the White House National Security Council, US Department of Defense, and US Department of Commerce did not respond to requests for comments.
TSMC Chairman Mark Liu previously hinted to CNN that even in the event of a CCP military attack, TSMC would not serve them.
Liu stated, “There are no winners in war; everyone is a loser. The Taiwanese people have built their own democratic system, choosing the way of life they desire.”
“No country can control TSMC by force, and any military action or invasion would render TSMC factories inoperable. TSMC is a sophisticated manufacturing facility that requires constant coordination with countries like Europe, Japan, and the United States for materials, chemicals, equipment parts, engineering software, and testing. TSMC operates through the collective efforts of many people, and even with control through force, it cannot operate normally.”
“If TSMC were to cease operations, it would bring enormous economic losses to China, as their advanced component supplies would suddenly vanish. Therefore, I believe they will think twice before taking any action,” Liu warned.
ASML provides joint-service contracts for some customers to conduct routine maintenance themselves, allowing customers such as TSMC access to their machine systems.
EUV lithography machines are currently the cutting-edge tools for chip production, with ASML being the sole global manufacturer capable of producing them. The Dutch government has banned the sale of EUV to China since 2019, sparking discontent from the CCP.
EUV utilizes high-frequency light waves to print the smallest transistor in existing microchips, enabling the production of chips for artificial intelligence applications and more sensitive military applications.
In May last year, US Congressman Seth Moulton stated, “China (CCP) should be clear that if they invade Taiwan, the US will destroy TSMC.” However, Moulton emphasized that he mentioned this topic to deter the CCP and not because it is the best strategy.
The US has been working to prevent the CCP from acquiring high-end chips, collaborating with allies to restrict the export of advanced chip manufacturing equipment and chips to China. The goal is to prevent the CCP from utilizing high-end chips for military purposes.
The US has invested billions of dollars into TSMC and has shifted a portion of its chip production to North America.
TSMC is also constructing facilities in Japan, which may help shield them from the impact of a potential CCP attack on Taiwan.
While the CCP has never governed Taiwan, they have consistently claimed sovereignty over the island and stated they would not rule out the option of using force to take Taiwan. The US and Europe have continuously warned Beijing not to alter the status quo in the Taiwan Strait.
Approximately 90% of the world’s most advanced chips are manufactured in Taiwan. Safeguarding Taiwan and maintaining the status quo is not only significant for the US but also for developed Western nations economically. Last April, EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, mentioned in a French newspaper that Europe must pay close attention to the Taiwan issue and dispatch warships to patrol the Taiwan Strait to ensure peace in the region.
“The (aggressive) actions towards Taiwan must be rejected, not only for moral reasons but also because from an economic perspective, the consequences will be extremely severe as Taiwan plays a strategic role in producing the most advanced semiconductors,” Borrell stated.