US Commerce Secretary Gina Raimondo says if China were to reunify with Taiwan, the US would be devastated due to the ramifications that would hold for the chips market.
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Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) headquarters in Hsinchu, Taiwan, Wednesday, Oct. 20, 2021 (AP Photo/Chiang Ying-ying)
In a congressional testimony on Wednesday, US Commerce Secretary Gina Raimondo emphasized the potentially severe consequences for the United States if China were to decide to reunify with Taiwan.
Raimondo, showcasing that the US is only interested in Taiwan’s “security” because of its importance in the microchip sector, highlighted the critical role of Taiwan in microchip supply and production, stressing the decades-long cooperation between Taipei and Washington in this domain.
Speaking before the US House Appropriations Subcommittee on Commerce, Justice, and Science, Raimondo underscored the significance of Taiwan’s contribution to the microchip industry. She pointed out that the United States currently relies heavily on Taiwan Semiconductor Manufacturing Company (TSMC), procuring 92% of its leading-edge chips from the Taiwanese firm.
Raimondo refrained from speculating on the likelihood or manner of such action from China but emphasized the potential devastation it could cause to US interests. She noted that TSMC’s strategic location and expertise in semiconductor manufacturing make Taiwan indispensable to the United States.
The Commerce Secretary highlighted TSMC’s plans to expand its operations in the US, particularly its facility in Arizona, where the company aims to produce highly sophisticated 2-nanometer and 3-nanometer chips.
While TSMC’s US facility holds promise for future supply, the current reliance on Taiwanese production remains paramount, she stressed.
TSMC in US markets
The Taiwan Semiconductor Manufacturing Company (TSMC) announced in April a $6.6 billion plan to launch the construction of a third semiconductor plant in Arizona in collaboration with the US Department of Commerce.
According to the company, the $6.6 billion funding resulted from a Preliminary Memorandum of Terms (PMT) with the US Department of Commerce, intended to contribute to the CHIPS and Science Act.
It further stated that the decision to build a third semiconductor plant is driven by strong customer demand and aims to meet the growing need for advanced semiconductor products in the US.
“TSMC today announced that the US Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms (PMT) for up to US$6.6 billion in direct funding under the CHIPS and Science Act. TSMC also announced plans to build a third fab at TSMC Arizona to meet strong customer demand leveraging the most advanced semiconductor process technology in the United States,” the statement read.
The statement also indicated that, in addition to the $6.6 billion in direct financing, the memorandum also provides access to up to $5 billion in loans for TSMC.
It is worth noting that China considers Taiwan an integral part of its territory and has long condemned any US engagement with Taipei as interference in its internal affairs. President Xi Jinping has expressed China’s aim for peaceful reunification with Taiwan, but the possibility of using force remains.
US President Joe Biden underlined that Washington was committed to defending Taiwan in the event of an unprecedented attack while emphasizing that the US does not advocate for the island’s independence.
