Apple CEO Tim Cook and a handful of other top tech executives recently attended a classified CIA briefing, where they were warned that China could attack Taiwan as soon as 2027, according to an in-depth report by The New York Times (Paylink).
CIA director William Burns and director of national intelligence Avril Haines reportedly shared the latest intelligence on China’s military plans to Cook, Nvidia CEO Jensen Huang, AMD CEO Lisa Su, and Qualcomm CEO Cristiano Amon.
The report claims Cook told officials afterward that he slept “with one eye open.”
In 2021, a senior U.S. military official had told Congress that the armed services believed President Xi Jinping of China wanted his army to be ready to take Taiwan by 2027:
Jake Sullivan, Mr. Biden’s national security adviser, ranked the U.S. reliance on Taiwan for semiconductors as one of America’s greatest vulnerabilities. He wanted the industry to recognize the risk and support construction of U.S. manufacturing plants. Mr. Biden also wanted to provide $50 billion in government subsidies to build semiconductor plants domestically [resulting in the CHIPS and Science Act of 2022].
“We were saying: ‘This is crazy. We have to do something about it,'” Mr. Sullivan said in an interview.
The tech firms in question all rely heavily on Taiwan Semiconductor Manufacturing Company (TSMC) for their chip needs. The company produces approximately 90% of the industry’s advanced chip needs. TSMC supplies all of Apple’s custom silicon needs, using the chips in its iPhone, iPad, and Mac lineups.
A confidential 2022 report commissioned by the Semiconductor Industry Association shared by the Times, shows that losing access to the Taiwanese chip supply would drop the world into the worst economic crisis since the Great Depression. US GDP alone would be expected to plunge 11%. A January 2024 Bloomberg report estimated that such a conflict would cause the global economy to take a $10 trillion hit.
Despite the dire warnings, the Times investigation found that Apple and other companies were reluctant to commit to the purchase of more expensive chips from factories in the US. Domestically-produced chips can cost as much as 25% more than those made in Taiwan, due to increased labor, material, and permitting costs. While Apple chip supplier TSMC has chipmaking plants in Arizona, the technology there usually runs a generation behind Taiwanese facilities, thanks to the Taiwan government’s unofficial policy that requires TSMC to keep its most advanced manufacturing technology restricted to the island.
That doesn’t mean that Apple hasn’t taken steps to ease the pain of a possible Chinese invasion into Taiwan. Cook last year announced Apple would invest $100 billion to increase US manufacturing capacity, with the money going to support TSMC and other chipmakers’ US expansion plans. Apple is also reportedly evaluating Intel’s manufacturing capabilities.
