Would China Invade Taiwan for TSMC?

Would China Invade Taiwan for TSMC?

The second piece of a two-part analysis focusing on semiconductors and cross-strait geopolitics.

Our previous article explained the importance of the Taiwanese firm TSMC as a critical link in the global semiconductor supply chain. Although it is not the only firm with the ability to manufacture cutting-edge logic chips, TSMC is the only viable choice for chip design companies in many situations, and under normal market conditions is likely to remain so for years to come. Control of TSMC’s foundries in Taiwan might thus appear a decisive factor both in Beijing’s readiness to risk attempting unification through force, and for other states deciding whether to take a strong stance against this.

Widening the lens, however, it becomes apparent that TSMC is in fact unlikely to tip the balance. First, invasion likely remains at the bottom of the list for China’s leaders when sizing up solutions to the “Taiwan problem.” Beijing’s military options are components of a long-term political strategy predicated on basic stability across the Taiwan Strait and relying upon China’s growing economic gravity to create the conditions for peaceful unification. This situation has favored China’s economic and technological rise, in which Taiwanese firms including TSMC have played a significant part.