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Taiwan has under three weeks of energy
After three weeks, the island browns out. A chip fab that gets turned off does not come back on for 90 days. The economic impact of a Taiwan brownout is greater than the Great Depression's, worldwide.
A blockade does not need an invasion. It only needs to cut off the island's energy, oil included, for about three weeks. The figure comes from a big article in the Wall Street Journal on the subject.
China has blockaded the Taiwan Straits an estimated seven times over the last four years. Those were exercises, and they were provocative.
Chipmaking elsewhere is moving, slowly. The United States now builds about 18% of the world's leading-edge chips, up from about 12%, with Intel starting to operate as a real foundry and TSMC's factories running at scale. It is far from 50%.
Why can't a chip fab restart quickly?
A wafer moves through hundreds of processing steps over roughly two to three months, inside cleanrooms where temperature, air purity, and chemicals are held to tight tolerances. A power loss in the middle of that process can ruin every wafer in progress. Equipment must then be recalibrated and the cleanroom environment restored before production resumes. Fabs are therefore run around the clock, with backup power built in.
Why is Taiwan so exposed on energy?
Taiwan has few domestic fuel resources and imports the large majority of its energy, according to the island's own energy authorities. Much of its electricity comes from imported liquefied natural gas and coal. Liquefied natural gas is kept at about minus 162 degrees Celsius, and storage tanks slowly lose some of it as it warms, which limits how much can be stockpiled. That is why days of reserve are counted in weeks.
Why is so much chipmaking concentrated in Taiwan?
The concentration follows from the foundry model, in which companies that design chips pay a specialist to make them. TSMC, founded in Taiwan in 1987, became the largest of those specialists. Its most advanced production lines, which require the newest and most expensive equipment, sit mostly on the island. The 2022 CHIPS and Science Act in the United States set aside about 52 billion dollars in subsidies to build more capacity at home.
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