What happens if TSMC is destroyed?

Question

With the Russian invasion of Ukraine, a lot of people are thinking about supply chains, especially when those chains are rooted in a hostile foreign country.What happens (to the US, EU, or whatever else you might have insight on) if TSMC is destroyed, say during a Chinese invasion of Taiwan? Are we facing a "1-year supply shortage while companies retool to US/EU fabs", or "nobody gets new electronics/cars for 5 years while whole chips are designed and fabbed, and their containing systems completely reworked"?My current working hypothesis: the former case sounds inconvenient - the latter sounds like it would cause riots in at least some countries (most notably the US with our electronics addiction and high silicon-per-capita ratio).However, I have very little experience with electronics design or semiconductor logistics. I know that there are a few silicon wizards floating around - any projections on the above?

jleyank · Accepted Answer

If you're positing an invasion of Taiwan, chips are the last of the world's problems. Where are all of the devices made with those chips going to be made or shipped from? What could, for example, Apple even sell vs. a China embargo?Autarky isn't always the best solution, nor the cheapest solution, but sometimes it's a good solution. Or at least a safe one. Just do it peacefully...

seanmcdirmid · Answer

A lot of the fab equipment, along with the technical secrets needed to produce such equipment, is locked down in the USA and western Europe. So it really isn't that hard to set up high yield/modern process FABs outside of Taiwan.The bigger loss would be the more affordable talented Taiwanese engineers that the west doesn't really have. If they somehow got out of Taiwan before the fabs are destroyed, their work could be recovered relatively quickly.

farseer · Answer

I think TSMC has built a sold production line/process to make high end chips but all the equipment still comes from EU, Japan, America. Samsung in theory can makeup the shortfall over a few years. We would be in more trouble if ASML drowns in a Tsunami.

goldname · Answer

TSMC should be the least on your mind if China goes to war with the USA

simonblack · Answer

That would pretty much mean that most countries would be starting off from a level playing field in producing their own chips. With South Korea being top dog for a while.Within 5 years or so, China would become the biggest producer as it has the money available for the greatest investment. The US would continue its decline from being the top dog in the 1980s to becoming pretty much irrelevant in chip production, though they would still be amongst the top designers for a while longer.

randomhodler84 · Answer

This would mean no more stuff for decade, and likely set the world back decades. We are already facing the specter of famine due to loss of crop yield from loss of fertilizer from the oil industry with regards to the Russia-Ukraine war. A PRC vs ROC war would starve the world of general tech. No cars no phones no laptops no servers. Back to the Stone Age.

als0 · Answer

Chip designers will use fabs at Samsung or Intel.

axiosgunnar · Answer

Immediately deck yourself with all the electronics you might need over the next decade, and then some. It would get really nasty.

bick_nyers · Answer

It would go far beyond the scope of just the semiconductor supply chain. We would likely enter a modern dark ages.

baybal2 · Answer

I will weight in as somebody who had aspirations for a career in semiconductors more than a decade ago.
Taiwan, and Asian semi ecosystem at large is unique, and irreplaceable, and not only TSMC as such.
The fall of Taiwan will be:
1. Loss of unique, black box knowhow which people never put into any patents
2. Loss of single source consumables - a lot of chemical industry, metallurgy, plastic, machinery all exclusively used only by semi industry
3. Loss of 80% of world's semi workforce, both brains, and hands
4. Loss of services companies, and big part of the ecosystem supporting the fabs, like semiconductor logistics
5. Loss of unique semi equipment makers, not on the level of losing the crown jewel (steppers,) but nevertheless making it instantly impossible to build any new fab line until a replacement is redeveloped from scratch. People who say that Taiwan is not big in semi tool making don't have an idea.
So if you completely erase this part of the world, the maximum the world can hope for within 5 years is just to restore functioning of a single pre-existing fab per country.
All its outputs will be no doubt be only used for defence electronics.
In other words Facebook, Amazon, Google, and all tech industry all bye bye. Modern "disposable electronics" barely lasts 2-3 years.
South Korea, or Japan will be there first, and they will demand The King's Ransom for fab access.
The first new fabs built from scratch will only be possible to make in 7-9 years term, using eighties era technology, and that is if the war will end quickly.