My initial thoughts on this came the from the opposite side in terms of Taiwans security.
One of the major bounties for invading Taiwan would be in the acquisition and control of their chip manufacturing. Which - as you mention, the entire tech world is dependant on.
By moving some of that capability offshore, that incentive is gone.
Though I can see it from both sides.
China's main motivation isn't about controlling TSMC, that's just a useful side-objective if it comes to pass. Their main motivations are:
1) break the first island chain barrier and gain a naval base with unhindered access to the Pacific, and
2) shut down a high-functioning Chinese democracy that is a constant reminder to the people of mainland China that democracy works for Chinese people and that they don't actually need the CCP.
These are also the reasons the US and Taiwan's other allies like Japan will continue to defend the country even if it moves some chip production to safer locales.
Not that it is the only or even the most powerful leverage China has over the west, but it is still a massive one, and it has quite a lot of second-order effects.
They'll never control TSMC by invading Taiwan. TSMC will sabotage their equipment if it looks like a CCP invasion is about to succeed. CCP knows that, it's not their main reason for wanting Taiwan.
To say this would make the world worse off is a drastic understatement.
TSMC would be rendered "not operable," TSMC Chair Mark Liu said.
No it isn't. China under the Communist Party has never ruled or controlled Taiwan (since 1949). Taiwan democratized, developed, and got wealthy first, completely independently of China. Taiwan has never in modern history been an integral part of China.
Taiwan and China being one nation is the policy of the governments of both China and Taiwan.
Of course Taiwanese nationalism is it's own thing now, but the Taiwanese people seeing themselves as not Chinese is a relatively recent phenomenon - it's been functionally independent for less than 100 years, and before that it was a Japanese colony like several others that have since been reabsorbed by China.
I'm not supporting Chineses irredentism, and I don't think the parent comment was either. Taiwan should remain independent. What the parent was explaining is why China would want Taiwan no matter what - it's a historical part of China that is relatively recently separated, so they want it for purely nationalistic reasons. It's no different from Serbia and Kosovo, or Russia and swaths of Ukraine. The economics don't matter if all you care about is your wounded national pride.
No one in Taiwan and not even the current government consider China/Taiwan together. When KMT fled and created the constitution they claim China. Taiwan is now stuck in limbo because the people just want to live their lives in peace and already consider themselves Taiwanese and independent. But if they change the constitution then China will consider it a formal act of independence and use it as an excuse.
The US has taken steps recently to reduce china's ability to make chips domestically. See - https://www.seattletimes.com/business/chip-gear-maker-asml-a...
The equivalent of popping out the Intel/AMD/ARM CPU to disable a computer, and leaving the motherboard, RAM etc.
Why would you expect the US military to care about children or try to evacuate them?
This deal is in US and TW best interest. TW is still valuable as cutting edge is still made on island. So production and economics so benefit them. US still provides military protection / defense. They are still long term partners will aligned goals. And if China does invade TW, US can continue a long fight and win by falling back only a generation or two to is smaller but important domestic production to continue supporting its defense technology needs.
I can't speak for them, but I have to assume RW also sees its best interests if China invades to lose TSMC plants but US win the war and they maintain democracy, rather than keep TSMC plants but controlled by China and US lose the war and go under full control of mainland rule.
Plants can be rebuilt, just like Marshall plan or what will happen in Ukraine. TW wants long term freedom from China - strengthening US defense's tech position helps this the most.
The obvious option in event of PRC control is everyone deferring to mutual leverage, where US controls fab inputs, TW controls outputs, PRC negotiating access to % of high end production by controlling island. Meanwhile buys both US and PRC time to secure independant semi chain, TW gets to still profit off semi, much like pre techwar arrangment. That's the strategically rare win-win-win scenario where everyone gains / avoids loss vs having accessible leading edge setback 20 years. Of course PRC wins most in this arrangment, and US/TW relatively loses, but if PRC wins in TW scenario vs US, that's going to be least of worries / concessions. The least obvious option is US deciding to scorch earth tech that supports their most competitive high tech industries, responsible for huge % of competitive advantage, especially if that leaves PRC the biggest producer of mature nodes (where things are trending). Even less sensible considering long term timeline after which experts believes PRC can reach semblance of semi parity.
This is short/medium term balance / interest calculation irrespective of the deal - which I didn't comment on - substantial capacity won't shift off TW in the timelines US forecast PRC will make move. Leading edge isn't particularly relelvant to defense hardware ends which use mature nodes, nor does anyone project long fight with how irreplaceable modern platforms are. It's why PRC (and chip partners US is trying to coerce into export controls) views Oct chip curbs as attack on their commercial sector, not military since PRC also have small batch 7nm production capability.
> TW also sees its best interests
It's also obvious "best" TW interest is to hedge having continued leverage over being leading ledge supplier regardless of who wins. There is no scenario where giving away their silicon dominance makes sense, unless coerced to, which is why US had to unilaterally announce export controls - because CHIPS4 partners weren't biting and actively pushing back. Least of all because no one is sure TW can win local war against PRC. Wealthy TW industrialist/elites/chip talent would rather be wealthy under PRC control after war then be fruit farmers because their industry got glassed. Read between line of Morris Chang stating US efforts to reshore chips manufacturing doomed to fail - it's not commentary on US talent - but TW isn't ceding industry to be Americanized. IMO don't expect these plants to launch without hitch. Prolonged war is probably least in TW interests because island simply can't sustain past a few months on domestic resources. There's reason TW defense posture is not prepping for prolonged war like US wants, deep down leadership and industry knows best interest for TW is to survive short/sharp war as developed economy and work with whoever wins.
> strengthening US defense's tech position
Except, again, TW offshoring leading edge fabs doesn't substantively strengthen US defense indy that depend on mature nodes with respect to PRC war. As stated, US fabs will STILL depend on TW inputs for forseeable future - it's not just ASML that's bottle neck - niche suppliers and expertise will be stuck on TW long term. Also consider "partners" pushing back on unilateral US curbs or SKR, JP building out their own indigenous defense industry - very few are actually interested in giving/strengthining US further leverage especially at their cost. And let's be real, fabs aren't going to be rebuilt on TW if they get leveled when they can be reconstructed in more secure locations.
Seems unlikely? Right now Russian gas goes through pipeline in Ukraine to Europe. Either side miraculously avoided disabling it through entire war.
Both sides don't want China to take over the technology to produce state of the art chips and control the distribution of those chips. And in case of a war, no way is china continuing to sell those chips to the US defense dept. The profit is negligible compared to their strategic value. Different goals will produce a different result.
That's not the point though. Who runs those facilities now? TSMC aka Taiwan aka a western ally. Who stands to lose the most from TSMC facilities being burned to the ground? Taiwan (obviously) and the west.
As a layman with no background in international relations, to me it seems like TSMC is simply an extra bargaining chip for the Chinese government. Which is why I am all about the idea of building more TSMC facilities in places that are less susceptible to being invaded. And yes, the Arizona plant is just a drop in the bucket compared to their facilities in Taiwan, but you gotta start somewhere, and something is better than nothing in this case imo.
I'm not sure if that incentive was significant enough. In my eyes, PRC's interest in Taiwan is at best orthogonal with TSMC's manufacturing capabilities.
PRC wants Taiwan regardless of its production value (geopolitical & PRC narrative) though I'm sure they would like the control of chip manufacturing. However if the US did move all of its strategic production off island there would be less value accrued to defending outside that said keeping a close presence on China expansion is important to the US. So it would still have value maybe a bit less so.
Please excuse the human aspect of the population as we are separating that part of the discussion.