Carl Jackson: Taiwan is 100% reliant on Chinese supply chains today — 100% reliant. Chris, you talk about missiles, but I could just change that to NF3 as an example. If the Chinese government decided to put an export restriction on NF3, then the Taiwanese fabs would shut down.
This is where Chinese infrastructure will demonstrate its power. It’s not just about cost. They have multiple domestic options, all at the right capacity, all manufactured domestically. While it might be a few thousand kilometers away, there’s no import-export barrier requiring ships, planes, or export restrictions that could disrupt supply. That’s the real vulnerability in this business.
Chris Miller: That’s pretty ominous — the implications are obvious.
Carl Jackson: Taiwan — and I say this as someone who lives there and loves the country — is arguably the single worst location you could pick for semiconductor fabs. It has no natural resources, water is an issue, and there are significant geopolitical risks. They had a brilliant industry pioneer in Morris Chang, but if you were to look at a globe and choose where to drop a semiconductor industry, Taiwan probably wouldn’t make the list. It’s in seismic zone 4 — the earth moves regularly there. Not ideal for making these kinds of devices. But it is what it is, and they face existential supply chain risks.