The Center for New American Security (CNAS) is an independent, bipartisan organization headquartered in Washington, D.C. In a recent strategic simulation exercise, the impact of a technology outage on the operations of Taiwan Semiconductor Manufacturing Corporation (TSMC) was studied. TSMC is the world's largest foundry chip manufacturer, and it is responsible for supplying semiconductors to most of the world's first-tier technology companies.
The plant's pivotal role in the global economy has led to calls for it to bring some of its chip-making facilities to the United States. In this regard, TSMC is busy building a new facility in Arizona, USA. The facility is expected to start production in 2024.
In a strategic exercise conducted last April, CNAS analyzed the impact of possible disruption to Taiwan's semiconductor industry, with different players scrambling to gain an advantage after the fact. The exercise simulated a Scenario for January 2025, when the U.S. was unable to reduce its reliance on TSMC's leading semiconductor products in the competition. An imaginary political crisis pushed the relationship to the extreme of tension, and then TSMC engineers discovered a strange malfunction in their chip production line.
This "failure" is described by CNAS as:
Shortly thereafter, TSMC's three manufacturing plants reported problems with their production lines and stopped all production. TSMC engineers found that the code used to make the leading-edge chip design was compromised, although it was unclear whether it was due to a software failure or a cyberattack. As a result, chip manufacturing was suspended for two months, creating a shortage of the world's leading chips.
The crisis forms the basis of the entire simulation, with three teams responsible for developing their reactions and strategies for the situation. These actions can choose to influence five factors, namely public sentiment, skill level, the financial health of the target company, and their outputs and needs.
The exercise also allows teams to cooperate with each other or make decisions independently. It ran for 4 years, with a total of 4 simulations, and the simulation ended in 2029, and then injected random events in the middle to better simulate reality. According to the simulation results, the analysis results of the Us side are
In light of this, the U.S. government and industry must lower their expectations of TSMC. Given that Taiwan wants to preserve the production of cutting-edge chips to add a sense of security, it is unlikely to be enthusiastic about OEM efforts. The study's recommendations to the United States included engaging other countries in the technology struggle, prioritizing the development of intellectual property rights, developing contingency plans, and so on.
The report concludes by saying that the semiconductor industry is vital to modern life due to the ubiquity of chips in technology products. It stressed that no effort would succeed if only the Government was included. Instead, CNAS believes that companies such as Intel Corporation, Advanced Micro devices Inc. (AMD), and Qualcomm Need to be part of these efforts, particularly by developing research and development coordination among them to ensure U.S. dominance in semiconductors.