Editorial Notes

Dear Reader,

I continue to be reminded about the potential for catastrophic supply chain disruptions caused by the auto industry's reliance on chips from Taiwan Semiconductor Manufacturing Company. Way too much of what TSMC supplies to the auto industry is single sourced. As Chris Miller points out in his highly praised, bestselling book, Chip Wars, about the fight for the world's most critical technology, much of the chipmaking capacity the auto industry relies on "is within easy range of PLA [People's Liberation Army] missiles […] Looking at the role of semiconductors in the Russia-Ukraine war, Chinese government analysts have publicly argued that if tensions between the U.S. and China intensify, 'we must seize TSMC'."

Chinese officials are not the only ones making inflammatory public statements about TSMC. According to a blog post at the Council on Foreign Relations website, a former U.S. national security advisor has advocated for the destruction of Taiwanese chip fabs should they fall into China's hands, implying that the threat would serve as a deterrent to Chinese aggression. The Council on Foreign Relations is an American think tank.

Thankfully, the U.S. security advisor's position isn't supported by the Council. Nevertheless, the geopolitical discourse around TSMC is worrisome and will likely lead many in the industry to redouble efforts to lineup second sources for the chips sourced from Taiwanese foundries. That transition will be ar- duous and expensive and, in the short term at least, will lead to more costly semiconductors.

Respectfully,

Paul Hansen

Editor

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