The world's top chipmakers can flip a 'kill switch' should China invade Taiwan, Bloomberg reports

microsoft, the world's top chipmakers can flip a 'kill switch' should china invade taiwan, bloomberg reports

ASML Holding logo is seen at company's headquarters in Eindhoven Reuters

  • Chip makers ASML and TSMC can disable advanced chipmaking machines remotely, Bloomberg reports.
  • The move addresses growing fears of a Chinese invasion of Taiwan, a key semiconductor producer.
  • A China-Taiwan conflict could severely impact the global economy.

Two of the world's most important chip companies can flip a "kill switch" remotely on their most advanced chipmaking machines should China invade Taiwan, Bloomberg reported on Tuesday, citing people familiar with the matter.

The Netherlands's ASML — Europe's top tech company by market value — supplies advanced machines to chip-making companies. They include Taiwan's TSMC, which produces, by some estimates, 90% of the world's most advanced processor chips.

The news of a forced shutdown, or a "kill switch," on ASML's chip-making gear comes amid intensifying rivalry between Washington and Beijing and mounting concerns over a potential Chinese invasion of Taiwan, which Beijing claims as its own territory.

Taiwan is the world's epicenter for semiconductor chips, the ubiquitous parts that are used in products from data centers to smartphones. A war in the region would have major consequences for the global economy.

The US, citing national security concerns, imposed restrictions on China under the Advanced Computing Chips Rule in November 2023. The restrictions make it harder for the East Asian giant to import advanced AI chips from American manufacturers.

The US has also pressured the Netherlands to block some ASML exports to China to limit the country's ability to manufacture advanced chips. The Dutch company has also said it will stop servicing some equipment previously exported to China.

But US concerns over a Chinese invasion of Taiwan remain, and Washington has expressed them to Dutch and Taiwanese officials, Bloomberg reported. ASML assured Dutch officials about the option to push the "kill switch" when they met with the company, per the media outlet.

The option applies to ASML's line of advanced extreme ultraviolet machines, according to Bloomberg.

Taiwan's TSMC is the largest buyer of these 200 million euro, or $217 million, machines. They print the tiny microchip transistors used to make chips for artificial intelligence and military applications.

Rising concerns over Taiwan Strait developments

There are concerns about China's intensifying drills around Taiwan after Taiwan inaugurated its new President, William Lai — whom Beijing has branded as a separatist — on Monday.

Beijing stepped up military activity around Taiwan ahead of Lai's inauguration and on Thursday announced drills as a "strong punishment for the separatist acts of 'Taiwan independence' forces," said Li Xi, a spokesperson for China's People's Liberation Army.

Chipmaking supply chains are changing amid heightened geopolitical tensions.

TSMC is diversifying production with a second facility in Arizona and upcoming new plants in Japan and Germany. But new facilities will take time to come online.

The US is also taking steps to boost chip manufacturing through the CHIPS Act, which provides billions of dollars in subsidies for domestic production, research, and workforce development.

But Nvidia CEO Jensen Huang told Bloomberg TV on Tuesday that that the world's tech sector is likely to continue depending on Taiwanese manufacturing for "some time." He said it would be "very difficult" for Nvidia to serve its customers without the island.

ASML declined to comment to Business Insider.

TSMC and the Dutch foreign affairs ministry did not immediately respond to Business Insider's requests for comment. They declined comment to Bloomberg.

If you enjoyed this story, be sure to follow Business Insider on Microsoft Start.

OTHER NEWS

34 minutes ago

Jaylen Brown's Juice Foundation holds sweepstakes for tickets to Game 5

37 minutes ago

Trump denies Milwaukee ‘horrible’ city comment: ‘Democrats are making up stories’

39 minutes ago

Trump Confuses Doctor's Name While Challenging Biden to Cognitive Test

39 minutes ago

Why these strong ASX ETFs could be top long term picks

39 minutes ago

Cameron insists Tories are ‘fizzing with ideas’

39 minutes ago

Fastest goal in Euros history: Albania’s Nedim Bajrami breaks all-time record for quickest opening goal in UEFA European Championship match

39 minutes ago

Why this photo of a mobile speed camera operator on a lawn has sparked outrage

45 minutes ago

Investors Fear Long Stretch of Calm in Markets Can’t Last

45 minutes ago

Actress Patricia Heaton: It's up to Christians to do something about antisemitism

45 minutes ago

Lessons Learned from Kings' Championship 10th Anniversary

45 minutes ago

McDavid, Oilers avoid sweep, thump Panthers 8-1 in Game 4 of Stanley Cup final

45 minutes ago

'Custody For 90 Days Will Ruin Lives': NCP (SP) Leader Jitendra Awhad On New Criminal Laws

45 minutes ago

Indian Documentaries Ride Global Wave as Local Funding and Distribution Concerns Remain

45 minutes ago

Jarrett Stidham may be current leader in Denver Broncos' QB race

45 minutes ago

Francoise Hardy, French singer and 60s pop icon, dies aged 80

45 minutes ago

Dodgers face injury attrition as ace leaves with triceps tightness

45 minutes ago

Steelers GM Omar Khan discusses team's relationship with RB Najee Harris

45 minutes ago

Struggling Hailie Deegan may not be ready for bright lights of NASCAR

49 minutes ago

Chinese premier promises more pandas and urges Australia to put aside differences

50 minutes ago

Hajj 2024: Saudi Arabia implements advanced cooling techniques in holy sites amid scorching heat

50 minutes ago

Italy 2-1 Albania: Player ratings as holders begin Euro 2024 with comeback victory

50 minutes ago

Toni Kroos' lack of arrogance and calmness hailed after 'really powerful' team talk

50 minutes ago

Government: Labour’s manifesto contains tax rises, not cuts

50 minutes ago

AFL kiss between TV host and footy legend sparks furore: 'It is a first'

50 minutes ago

Video: Kim Kardashian shows off her curves in a fitted outfit as daughter North West sports custom pajamas while celebrating her 11th birthday in NYC

50 minutes ago

Video: Pregnant Hailey Bieber cradles her baby bump in a gray crop top as she celebrates '2 years of Rhode' skincare

59 minutes ago

Top 5 Animal Frights

59 minutes ago

Montenegro, Millwall goalkeeper Matija Sarkic dies at age 26

59 minutes ago

Derelict Enniscorthy farmhouse with 2.5 acres of land on market for €285,000

59 minutes ago

John Stones issues Euro 2024 rallying cry after overcoming double scare in major boost for England

59 minutes ago

'Everyone gives us no chance', says Poland boss Probierz

59 minutes ago

The Property Brothers' Biggest Advice For First-Time Homebuyers

60 minutes ago

Pilgrims commence the final rites of Hajj as Muslims celebrate Eid al-Adha

60 minutes ago

American comedy legend Jerry Seinfeld is all smiles as he greets fans while exploring Perth ahead of Australian stand-up comedy tour

1 hour ago

No Messi, no problem! Inter Miami have to cope without absent star and have two men sent off... but STILL manage to score a last-minute winner to beat MLS rivals Philadelphia Union

1 hour ago

Murdered mom-of-five's boyfriend breaks his silence after ILLEGAL migrant was finally charged with raping and killing her - as cops reveal stunning breakthrough on her birthday and offer stern message to Joe Biden

1 hour ago

Serial celeb harasser 'Crackhead Barney' calls Quentin Tarantino a 'Zionist piece of s***' after troll previously screamed at Alec Baldwin

1 hour ago

Madonna, 65, tries to keep a low-profile in NYC in all-black outfit after her lawyers SLAMMED concert delay lawsuit as a 'harassment campaign' from fans

1 hour ago

Bryson DeChambeau takes control of US Open with glorious 67 as Rory McIlroy rues late bogeys

1 hour ago

Kariega cemeteries severely damaged by floods