Two of the world’s largest chipmakers could remotely press a “kill switch” on their most advanced chipmaking machines if China invades Taiwan, Bloomberg reported Tuesday, citing people familiar with the matter.
Dutch company ASML – Europe’s largest technology company by market value – supplies advanced machinery to chip manufacturing companies. These include the Taiwanese company TSMC, which produces, according to some estimates, 90% of the most advanced countries in the world processor chips.
News of a forced shutdown, or “kill switch,” of ASML’s chipmaking equipment comes amid growing rivalry between Washington and Beijing and growing concerns about a possible Chinese invasion of Taiwan, which Beijing claims as its own territory.
Taiwan is the global epicenter of semiconductor chips, ubiquitous components used in products from data centers to smartphones. A war in the region would have major consequences on the global economy.
The United States, citing national security concerns, imposed restrictions on China under the Advanced Computer Chip Rule in November 2023. The restrictions make it more difficult for the East Asian giant to importing advanced AI chips from American manufacturers.
The United States has also pressured the Netherlands to block some ASML exports to China to limit the country’s ability to make advanced chips. The Dutch company also announced that it would stop providing services on some equipment previously exported to China.
But U.S. concerns about a Chinese invasion of Taiwan remain, and Washington has expressed them to Dutch and Taiwanese officials, Bloomberg reported. ASML assured Dutch officials of the possibility of pressing the “kill switch” during their meeting with the company, according to the media.
The option applies to ASML’s advanced line of extreme ultraviolet machines, according to Bloomberg.
Taiwanese TSMC is the largest buyer of these machines worth 200 million euros, or $217 million. They print the tiny microchip transistors used to make chips for artificial intelligence and military applications.
Growing concerns over developments in the Taiwan Strait
There are concerns about China’s intensifying exercises around Taiwan after Taiwan swore in its new president, William Lai – who Beijing has called a separatist – on Monday.
Beijing stepped up military activities around Taiwan ahead of Lai’s inauguration and announced drills on Thursday as “severe punishment for the separatist acts of Taiwan independence forces,” said Li Xi, a spokesman for the Taiwan Independence Force. Chinese People’s Liberation Army.
Chip manufacturing supply chains are evolving amid heightened geopolitical tensions.
TSMC diversifies its production with a second factory in Arizona and new factories coming in Japan And Germany. But the new facilities will take time to come into operation.
The United States is also taking steps to boost chip manufacturing through 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 the global technology sector would likely continue to rely on Taiwan’s manufacturing industry for “some time.” He said it would be “very difficult” for Nvidia to serve its customers without the island.
ASML declined to comment to Business Insider.
TSMC and the Dutch Ministry of Foreign Affairs did not immediately respond to Business Insider’s requests for comment. They declined to comment to Bloomberg.
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