The two largest microchip manufacturing companies in the world are considering deactivating their machines if China invades Taiwan

The two largest microchip manufacturing companies in the world are considering deactivating their machines if China invades Taiwan
The two largest microchip manufacturing companies in the world are considering deactivating their machines if China invades Taiwan

Workers in front of a “High NA EUV” lithography system from computer chip maker ASML at an Intel facility in Oregon (Intel Corporation/Handout via REUTERS)

ASML Holding N.V. and Taiwan Semiconductor Manufacturing Co. They have the means to disable the world’s most sophisticated chip-making machines in case China invades Taiwanaccording to people familiar with the matter.

US government officials have privately expressed their concern to both their Dutch and Taiwanese counterparts about what would happen if Chinese aggression turns into an attack on the island responsible for the production of the vast majority of the world’s advanced semiconductors, two of the people said, speaking on condition of anonymity.

ASML reassured the authorities about its ability to remotely disable machines when the Dutch government met with the company about the threatsaid two other people. The Netherlands has carried out simulations of a possible invasion to evaluate the risks are better, they added.

The spokespersons for ASML, TSMC and the Dutch Ministry of Commerce They declined to comment. Spokespeople for the White House National Security Council, the Department of Defense and the U.S. Department of Commerce did not respond to emailed requests for comment.

Remote Closing Applied to ASML’s Extreme Ultraviolet Machine Linebased in the Netherlands, known in the industry as EUVof which TSMC is your main client. EUVs take advantage of high-frequency light waves to print the smallest microchip transistors everallowing the creation of chips for artificial intelligence applications and more delicate military applications.

An ASML extreme ultraviolet machine in the company’s clean room and research laboratory. (Source: ASML Holding NV)

China has long claimed that the island of Taiwan is its territoryand the President Xi Jinping advocates peaceful unification and refuses to rule out military intervention. Although U.S. officials have warned that China is seeking the ability to invade Taiwan in 2027, Taiwanese officials have downplayed the threat of an imminent invasion and officials in Beijing have said U.S. warnings about a timetable are unfounded. The People’s Liberation Army is not massing troops on the coast and Xi has focused primarily on stabilizing the Chinese economy to achieve long-term development goals.

An EUV, the size of a city bus, requires regular inspections and updates. As part of that, the company can remotely force a shutdown that would act as a kill switch, the people said, speaking on condition of anonymity. The Veldhoven company is the only world manufacturer of these machineswhich are sold for more than 200 million euros (217 million dollars) each.

ASML technology has been long subject of government interventions intended to prevent it from falling into the wrong hands. The Netherlands prohibits the company from selling EUV machines to China, for example, fearing they could give its rival an advantage in the global chip war.

The ASML logo is seen near the motherboard of a computer in this illustration taken January 8, 2024. (REUTERS/Dado Ruvic)

It was at the behest of the US that the The Dutch this year began stopping exports of ASML’s most sophisticated chip-making machines. Even before the ban went into effect, US authorities had asked ASML to cancel some previously scheduled shipments to Chinese customers, it was reported. BloombergNews.

The company anticipates that Up to 15% of this year’s sales to China will be affected by the latest export control measures.

The data suggests that restrictions may have come too late to stop Chinese advances. Huawei Technologies Co. last year made a smartphone to compete with Apple Inc.’s iPhone using chips made with older ASML printers in combination with tooling from two U.S. suppliers, it said. BloombergNews in October after performing a breakdown of the phone.

Beijing has made technological self-sufficiency a national priority and the efforts of Huawei for promoting the design and national manufacturing of chips, they have received support from the Government.

The Biden administration also wants to boost semiconductor production on US soilpromising $39 billion in subsidies to chipmakers to protect themselves from any future supply chain disruptions.

The Biden administration also wants to boost semiconductor production on US soil (REUTERS/Leah Millis)

There is a lot at stake, since About 90% of the world’s most advanced chips are made in Taiwan. On May 20, Taiwan took possession of Lai Ching-te as president of the world chip center, putting in power a man whom Beijing has branded an “instigator of war.”

The EUV machine has helped make ASML the most valuable technology company in Europewith a market capitalization that exceeds 370,000 million dollarsmore than double that of its client Intel Corp.

ASML has shipped more than 200 of these machines to customers outside China since they were first developed in 2016, with TSMC snapping up more of them than any other chipmaker.

EUVs require such frequent maintenance that without ASML spare parts they quickly stop working, the people said. On-site maintenance of EUVs poses a challenge because they are housed in clean rooms that require engineers to wear special suits to prevent contamination.

ASML offers certain customers joint service contracts in which they themselves perform some of the routine maintenance, allowing customers like TSMC to access the system of their own machines. ASML says it cannot access data owned by its customers.

The president of TSMC, Mark Liuhe hinted in an interview given in September to the cnn that any invader of Taiwan would find his company’s chip-making machines out of commission.

“No one can control TSMC by force,” Liu said. ““If there is a military invasion, the TSMC factory will be inoperative.”

(With information from Bloomberg)

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