• Taiwan is a major player in the production of semiconductors globally
  • The paper was penned by US scholars Jared M. McKinney and Peter Harris
  • China rejected the claim, saying the reunification was not for TSMCs

Taiwan should destroy its all-important semiconductor industry if they want to stave off a Chinese invasion. This "scorched-earth strategy" can leave Beijing uninterested in unification as it would create an unwanted major economic crisis on the mainland, said a report published by a U.S. military journal.

A top U.S. Army War College paper titled "Broken Nest: Deterring China from Invading Taiwan" says this unique strategy can leave the island "unwantable" for China.

The paper that appeared in the quarterly academic journal "Parameters," was penned by scholars Jared M. McKinney and Peter Harris. It also topped a list of the most downloaded papers of 2021.

According to McKinney and Harris, the regional military balance has shifted in China’s favor and a potential war with the US over Taiwan is no longer a deterrent for China.

Hence, the United States and Taiwan should lay plans for a "targeted scorched-earth strategy" that would render Taiwan not just unattractive if ever seized by force, but positively costly to maintain.

"This could be done most effectively by threatening to destroy facilities belonging to the Taiwan Semiconductor Manufacturing Company (TSMC), the most important chipmaker in the world and China’s most important supplier," the paper read.

This would create a desperately unwanted major economic crisis in China, leaving it chipless during the war since only six percent of semiconductors used in China were produced domestically in 2020.

"Even when the formal war ended, the economic costs would persist for years. This problem would be a dangerous cocktail from the perspective of the Chinese Communist Party," the paper added.

The authors said that the challenge is to make the "threat credible to Chinese decision-makers" as if China suspects Taipei would not follow through on such a threat, then the deterrence fails.

"An automatic mechanism might be designed, which would be triggered once an invasion was confirmed," they added.

However, Beijing seems to have rejected the paper and the strategy. An article that appeared on the website of the Chinese State Council's Taiwan Affairs Office on Dec. 23 read that "the mainland’s pursuit of cross-strait reunification is definitely not for TSMC."

At present, Taiwan is a major player in the production of chips globally. The self-ruled island dominates the market and exports, accounting for more than 60% of total global foundry revenue in 2020.

According to Taiwanese media, the TSMC's could easily become a "casualty of the fighting" resulting in severing the supply of chips to China’s vast electronics industry. Even if the foundries survive a war, the global supply chain would be affected.

Demand for chips made by Taiwan Semiconductor Manufacturing Company has soared as the global economy reopens
Demand for chips made by Taiwan Semiconductor Manufacturing Company has soared as the global economy reopens AFP / Sam Yeh