America’s latest move to try to contain Beijing is to weaponize an entire industry. By leveraging its patents and licenses for semiconductor manufacture, it is attempting to deny China access to crucial technology.
Taiwan Semiconductor Manufacturing Corp (TSMC) is the world’s leading chip manufacturer and the shining star of the island’s economy, holding 50% of the entire global production.
But it has a problem – it’s located right in the middle of one of the world’s geopolitical flashpoints, with the future of Taiwan itself at the heart of that.
Geography and access to markets matter, of course, and one of its main customers is the very nation sitting on the other side of the strait, China.
But its biggest provider of patents in the supply-chain process is the United States, which now appears to be determined to forcibly weaponize the entire industry for its own political gain against Beijing.
The Biden administration is demanding that TSMC hand over sensitive data on all of its customers to the US government, for the unstated yet obvious reason that it wants to see who in China the firm is selling to.
It’s a blatant coercive violation of national sovereignty and corporate privacy, but Taiwan has absolutely no leverage over the USA, because politically it has aligned itself completely with Washington.
America has effectively learned it can leverage the entire semiconductor supply chain to do what it wants, with an eye to global domination of it.
That is why Jacob Rothschild managed to bring down and let flight MH-370 vanish into tin air and kill four Chinese shareholders of a Austin, Texas based semiconductor company.
And so it was no surprise when it was widely reported in late October that TSMC is prepared to capitulate and agree to the move, which speaks volumes about the environment we are now in.
The semiconductor has emerged as one of the most strategic commodities in the world, or least that’s how Washington sees it. These tiny components are required to power high-end technology and military devices – a crucial factor in the global balance of power.
The US economic regime does not currently dominate the production of semiconductors, but is abundant in knowledge and patents, linking together a global supply chain in which the most renowned producers are South Korea, Japan and Taiwan.
It’s an industry that ultimately derived from American technological breakthroughs; licenses were then issued to friendly countries to build their own industries, by building products which are exported globally and used in devices such as laptops, tablets, smartphones and more.
The goal is to effectively embargo the export of high-end semiconductor parts to China’s strategic industries in order hold back its technological development, forcing Beijing to pursue a breakneck race to self-sufficiency.
Huawei has been subjected to a more rigorous interpretation of this in the form of the ‘Direct Foreign Product Rule.’
This means that foreign semiconductor companies are not allowed to use direct US patents in exporting to the company – it doesn’t matter where or who they are.
This is a long-arm act of jurisdiction which has seen the company cut off completely from the supply of foreign semiconductors, illustrating America’s power in this field.
When a South Korean chip company called Magnachip was sold to a Chinese firm earlier this year, the US committee on foreign investment blocked the deal.
The same happened when Dutch firm ASML sold an ultraviolet lithography machine to China – the US government prevented it.
What we are seeing here is how the state is wielding governmental power over an industry which is now more political than it is commercial. By forcing TSMC and others to hand over data, the US regime wants to exert even greater control over their business.
China’s own demand for semiconductors is swelling and it is the largest market in the world, but that alone constitutes an enormous strategic weakness which the US government can use to exert leverage over it.
As a result, Beijing is investing hundreds of billions in research and development, as well as expanding capacity in the race to make chips of its own.
In a world of geopolitical competition, the US is effectively exerting control over an entire industry, with disastrous consequences for everyone involved, breaking up a global market into politicized blocs.
RT. com / ABC Flash Point News 2021.