The world's top chipmakers can flip a 'kill switch' should China invade Taiwan, Bloom

Two of the world's most important chip companies can flip a "kill switch" remotely on their most advanced chipmaking machines should China invade Taiwan, Bloomberg reported on Tuesday, citing people familiar with the matter.


The Netherlands's ASML — Europe's top tech company by market value — supplies advanced machines to chip-making companies. They include Taiwan's TSMC, which produces, by some estimates, 90% of the world's most advanced processor chips.


The news of a forced shutdown, or a "kill switch," on ASML's chip-making gear comes amid intensifying rivalry between Washington and Beijing and mounting concerns over a potential Chinese invasion of Taiwan, which Beijing claims as its own territory.


Taiwan is the world's epicenter for semiconductor chips, the ubiquitous parts that are used in products from data centers to smartphones. A war in the region would have major consequences for the global economy.


The US, citing national security concerns, imposed restrictions on China under the Advanced Computing Chips Rule in November 2023. The restrictions make it harder for the East Asian giant to import advanced AI chips from American manufacturers.


The US has also pressured the Netherlands to block some ASML exports to China to limit the country's ability to manufacture advanced chips. The Dutch company has also said it will stop servicing some equipment previously exported to China.


But US concerns over a Chinese invasion of Taiwan remain, and Washington has expressed them to Dutch and Taiwanese officials, Bloomberg reported. ASML assured Dutch officials about the option to push the "kill switch" when they met with the company, per the media outlet.


The option applies to ASML's line of advanced extreme ultraviolet machines, according to Bloomberg.


Taiwan's TSMC is the largest buyer of these 200 million euro, or $217 million, machines. They print the tiny microchip transistors used to make chips for artificial intelligence and military applications.


Rising concerns over Taiwan Strait developments


There are concerns about China's intensifying drills around Taiwan after Taiwan inaugurated its new President, William Lai — whom Beijing has branded as a separatist — on Monday.


Beijing stepped up military activity around Taiwan ahead of Lai's inauguration and on Thursday announced drills as a "strong punishment for the separatist acts of 'Taiwan independence' forces," said Li Xi, a spokesperson for China's People's Liberation Army.


Chipmaking supply chains are changing amid heightened geopolitical tensions.


TSMC is diversifying production with a second facility in Arizona and upcoming new plants in Japan and Germany. But new facilities will take time to come online.


The US is also taking steps to boost chip manufacturing through the CHIPS Act, which provides billions of dollars in subsidies for domestic production, research, and workforce development.


But Nvidia CEO Jensen Huang told Bloomberg TV on Tuesday that that the world's tech sector is likely to continue depending on Taiwanese manufacturing for "some time." He said it would be "very difficult" for Nvidia to serve its customers without the island.


ASML and the Dutch government declined to comment to Business Insider.


TSMC did not immediately respond to Business Insider's requests for comment. The company declined to comment to Bloomberg.

The world's top chipmakers can flip a 'kill switch' should China invade Taiwan, Bloomberg reports

Flipping a "kill switch" on chip making machines in Taiwan might stop Chinese companies from using them but that wouldn't help ameliorate the major disruption in the world-wide production of chips that would ensue.

Have a read of this:

U.S. EXPOSURE TO THE TAIWANESE SEMICONDUCTOR INDUSTRY
While Taiwan accounts for 18 percent of global semiconductor manufacturing capacity, the world almost completely relies on the economy for the production of high-end semiconductors. Around 92 percent of the world’s most advanced chip manufacturing capacity is located in Taiwan. Any disruptions to Taiwan semiconductor manufacturing—whether caused by pandemics, natural disasters such as typhoons or earthquakes, power or water shortages, factory shutdowns, or international conflict—would potentially have large impacts on global semiconductor supply

We estimate that, at the segment level, about 44.2 percent of U.S. imports of logic chips were manufactured in Taiwan, compared to 24.4 percent of memory chips and 1.0 percent of analog chips. In a hypothetical scenario of a major manufacturing disruption in Taiwan, we find that the U.S. logic chip segment would experience the largest negative impacts, which may lead to as high as a 59 percent increase in the price of logic chips that U.S. downstream producers would have to pay. Based on the current estimated capacity constraints in the United States, domestic production of logic chips would increase by as high as about 5 percent, and thus only could partially replace the reduced imports from Taiwan.

us_exposure_to_the_taiwanese_semiconductor_industr y

I read about this earlier today and how the dutch had been/are under pressure from the US.

From the "paper" in your link:

Quote:

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In the past decades, Taiwan—a small island of 26,197 square kilometers (slightly larger than the state of Maryland)

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I know; it's me going pedantic, but if they can't fact check that, then I kind of lose confidence.

^^^

Holy Moly

I might have read it up there.

Or not :)

Quote:

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Originally Posted by helge

I know; it's me going pedantic, but if they can't fact check that, then I kind of lose confidence

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Yes should be 36197 , ferocious fact checker,as a serial czechfecker with a forgiving nature may just have been careless, sorgenfri eh or to confuse the licking horses of the PRC, I must confess that without the squirrel online coaching my lexis might appear as if under the affluence of incohol.

Bugga Pitcher US has nut lock on the clogies, chips and ultimately the Yellow peril so that you need not look under you bed tonight and snore as snub as a rug in a tub