The US Secretary of Commerce says it would be "absolutely devastating" if China seized Taiwan Semiconductor Manufacturing Company (TSMC) and locked down the South China Sea.

“I'm not commenting on whether that's going to happen, how it's going to happen, or if it's going to happen, but what I can tell you is right now the United States buys 92 percent of its leading edge chips from TSMC in Taiwan,"
testified the secretary before the House Appropriations Committee yesterday.

Although the imported chips are vastly ahead of any semiconductors currently made in the USA, TSMC is slated to produce 2 nm and 3 nm chips in Arizona. The 2 nm chip production was initially scheduled to come online in 2026, but that was modified last month to 2028, when the fab would also produce 2 nm. TSMC is receiving $11.6 billion in funding from the US for the three Arizona fabs.

Congressman Jake Ellzey and Raimondo agreed during Wednesday's hearing that around a third of the world's commerce travelled through the South China Sea, making it essential to defend the area, including Taiwan.

China views Taiwan as a breakaway province yet Taiwan sees itself as master of its own domain. Some commentators think China has watched with interest the world's reaction to Russia invading Ukraine.

The scenario where China seizes Taiwan and TSMC has been the subject of many thought-exercises in the past. One of the most downloaded papers of 2021 from the US Army War College academic journal Parameters suggested that if the scenario became an imminent reality, the US should commit to bomb TSMC themselves.

Ellzey is not the only government official concerned about the state of the South China Sea, which is a part of the Indo-Pacific region. The Select Committee on the Chinese Communist Party (CCP) warned on Wednesday that the Pentagon is currently displaying an "alarming lack of urgency" regarding the vulnerability of US military bases in the Indo-Pacific.

According to the committee, "unclassified analysis suggests China has enough weapons to overwhelm [US] air and missile defenses protecting those bases" and strikes could "immobilize vital air assets, disrupt logistical chains, and significantly weaken [US] ability to respond in a conflict."

In her testimony, Raimondo redirected national security concerns away from such physical structures to the war tools of the digital age.

"When you think national security you might think guns, tanks, missiles, fighter jets. I think semiconductors, quantum, AI models," said Raimondo.

"What we are doing at the Commerce Department is constantly studying these dual-use technologies to figure out what do we have, where is China, and make certain that China cannot access our technology for their military," she added. ®

https://www.theregister.com//2024/05/09/hypothetical_tsmc_takeover_by_china/