The Taiwan question is extremely difficult.
On the topic of the thread, I don't think China can be under any illusions that it will help solve its semiconductor problem. For one thing, the chokepoint is SME, and Taiwan does not make that... it is ASML and other U.S. companies. Sure, China if it seizes EUV equipment on TW, can examine it and try to reverse engineer it, but that is not the same as manufacturing. If so China would have reversed engineered 14nm machines a long time ago.
And sure, it may cause some disruptions to the US supply chain, but the US has good-enough substitutes in Samsung, Intel, and GlobalFoundries. It would just accelerate the offshoring of semiconductor production to the US.
So I don't think China should make any decisions on Taiwan based on semis. There are bigger problems in Taiwan, such as how to pacify the people and get their consent to being governed, and how to deal with the embargos and sanctions that would follow any Chinese move on Taiwan, as well as possible US intervention.
But Taiwan question has to be solved somehow It cannot drag forever I agree that recovering Taiwan based only on semiconductor does not make sense I have no doubt that China will solve the semiconductor embargo just like she overcome countless embargo before.
Only this time the odd is overwhelming with bulging reserve and advanced industrial base , determined leadership, hardworking and intelligent people, She should solved this semiconductor restriction.
Now that the effort is elevated to emergency drive akin to attempt to build A bomb the government now get into act and coordinate the effort
China was hoodwinked into believing the mantra of globalization, division of work, comparative advantage etc because her elite study in US. They think they can depend on continue supply chain forgetting their own history with Soviet yes it is big blunder that they pay dearly. Anyway here is good article
Ambitions to Counter U.S. Blacklistings
Bloomberg News
Wed, March 3, 2021, 2:46 AM
(Bloomberg) --
In just two decades, China sent people into space, built its own aircraft carrier and developed a stealth fighter jet. Now the world’s youngest superpower is setting out to prove its capabilities once more -- this time in semiconductors.
At stake is nothing less than the future of the world’s No. 2 economy. Beijing’s blueprint for chip supremacy is enshrined in a five-year economic vision to be unveiled during a summit of top leaders in the capital this week. It’s a multi-layered strategy both pragmatic and ambitious in scope, embracing aspirations to replace pivotal U.S. suppliers and fend off Washington, while molding homegrown champions in emergent technologies.
China wants to build a coterie of technology giants that can stand shoulder-to-shoulder with Intel Corp. and Taiwan Semiconductor Manufacturing Co., conferring the same priority on that effort as it accorded to building atomic capability. While specifics of that endeavor won’t emerge for months, comments by government officials, Party mouthpieces like the People’s Daily and state think-tanks provide important clues about the envisioned road map.
Read more: Xi Mobilizes China for Tech Revolution to Cut Dependence on West
The approach entails making do over the next five years or so with aging semiconductors that are adequate for electric cars and even military applications, but can’t run advanced smartphones and similar devices. That buys China time to focus on fields like so-called third-generation chipmaking in which no country yet dominates and -- Beijing hopes -- create an array of indigenous giants in areas including machinery, software and new materials. The ultimate goal is to groom local alternatives to global linchpins like Cadence Inc. and Synopsys Inc. in design software and Europe’s ASML Holding NV in chipmaking gear.
“Semiconductors are a crucial sector in the information era that will lead the future of economic development,” Science & Technology Minister Wang Zhigang said at a press conference last week. “At the same time, China will strive to achieve self reliance and strengthen our own capabilities.”
China’s efforts gained urgency because the Biden administration is escalating a battle against what it called “techno-autocracies.” That could extend or even expand blacklistings that banned key transactions with corporations from Huawei Technologies Co. to ByteDance Ltd. and Tencent Holdings Ltd. To a country that imports $300 billion of chips annually, a worsening global shortage drives home the risk of relying on potentially hostile suppliers for the building blocks of everything from artificial intelligence to sixth-generation networking and autonomous vehicles.
It will take years for local companies to match foreign counterparts in manufacturing and design expertise, during which there’s no ready answer to the dominance of Japanese and American names in chipmaking equipment. Chinese companies will still only supply 35% of its domestic demand by the end of this decade, IDC analyst Mario Morales estimates.
They’ll also have to contend with Washington. The U.S. signaled it intends to go ahead with a Trump administration-proposed rule to secure the technology supply chain next month, a move that gives the Department of Commerce broad authority to prohibit transactions involving “foreign adversaries” like China.
“The United States and its allies should utilize targeted export controls on high-end semiconductor manufacturing equipment ... to protect existing technical advantages and slow the advancement of China’s semiconductor industry,” the National Security Commission on Artificial Intelligence, headed up by former Google chairman Eric Schmidt, recommended to Biden and Congress this week.
Huawei, the country’s largest technology company by revenue, underscores the leverage Washington wields. Once the world’s biggest smartphone maker, Huawei was forced to sell its Honor division and run at close to minimum production capacity after it lost access to chips from the likes of TSMC under American regulations.
Read more: China Said to Plan Broad Chip Sector Support to Fight Trump
“It just stimulates the Chinese community to accelerate their internal developments and eventually they may come out even stronger,” said Luc Van den hove, president of the Imec research center in Leuven, Belgium, which focuses on innovation in semiconductor technology. “And I think that’s certainly a risk of trying to keep the two worlds further apart.”
Beijing had set aside at the start of its last five-year plan around 1 trillion yuan ($155 billion) for potential investment in semiconductors over five to 10 years, according to McKinsey. It will now continue to bankroll research and investment in coming years, Wang said last week. China will increase fiscal support for scientific research and encourage leading companies to join national programs, he added. That should galvanize the much larger influx of private capital needed to produce genuine breakthroughs.
It’s an approach that’s worked before for the internet, where a mix of government and private capital helped build the likes of Alibaba Group Holding Ltd. and ride-hailing giant Didi Chuxing Inc. In February, the state-backed Global Times reported smartphone makers Xiaomi Corp. and Oppo acquired stakes in Jiangsu Changjing Electronics Technology Co., exemplifying the sort of private-sector involvement Beijing’s counting on.(cont)
