ASML EUV machines used by TSMC in Taiwan have Kill Switch
A Geopolitical Kill Switch
A Bloomberg Report notes concern by the US government to the Netherlands and Taiwan about the security of ASML Lithography machines used by TMSC in the event of an invasion of Taiwan by China.
During the meeting between the Dutch government and ASML, company representatives assured officials of their capability to remotely disable the machines in case of a threat, according to two sources. The Netherlands has conducted simulations to evaluate the potential risks of an invasion.
Representatives from ASML, TSMC, and the Dutch Ministry of Trade declined to provide comments. Requests for comments from the White House National Security Council, US Department of Defense, and US Department of Commerce were unanswered.
The remote shut-off feature pertains to ASML’s EUV machines, with TSMC being its largest customer. These machines use high-frequency light waves to produce the smallest microchip transistors, which are used in AI technologies and sensitive military applications.
The ASML EUV machines are about the size of a bus and cost around $220 million each. Since these machines are the only ones in the world, ASML has a monopoly. In short, they are the only machines capabable of producing the most advanced chips.
Being caught in the Chip War between the US and its allies against China means that ASML can only sell its least sophisticated machines to China which represent about 15% of its sales worldwide. It should be noted that even though ASML is a Dutch company it depends on US, German and Swiss technology and partnerships in the production of its machines. On page 25 of the 2023 ASML Annual Report, the company notes the impact of Geopolitical Risks and the Dutch Government Law of June 30th, 2023. This law places export controls the most advanced lithography machines. You can learn more about the company and then download the annual report if you wish at: https://www.asml.com/en
Summary: TSMC, a leading chip maker based in Taiwan, is a key player in the global semiconductor industry. Its strategic importance has led to concerns about its security, particularly regarding potential threats from China. The U.S. has expressed interest in safeguarding TSMC’s operations to prevent them from falling into Chinese hands. Geopolitical tensions and technological advancements have made TSMC a focal point in the U.S.-China rivalry.
Key Points:
- TSMC is a significant chip maker globally, surpassing even Intel and Samsung in revenue.
- The U.S. aims to protect TSMC’s chip-making capabilities from potential Chinese influence due to Taiwan’s geopolitical significance.
- Concerns exist about the security of TSMC’s operations, with discussions around safeguarding its facilities and equipment. This concern event extends to damage from natural events such as earthquakes, see recent Bloomberg article.
- Geopolitical tensions between the U.S. and China influence efforts to secure TSMC, with implications for the semiconductor industry and global power dynamics.
- Strategic moves by TSMC, ASML, the U.S., and China reflect the broader context of the U.S.-China trade war and competition for technological supremacy.
