Partial de-globalization appears inevitable – Maarten Buijs

Maarten Buijs is CEO of Surfix.

Partial de-globalization appears inevitable

My granddaughter recently turned two years old. In the life ahead of her, I see two significant challenges looming: global warming and China being the dominant power in an interconnected world. When her father was her age, I was working as a postdoc in a group at Harvard with a number of graduate students of Chinese background: one from Hong Kong, one from mainland China and three from Taiwan. The father of the one from Hong Kong also had a domicile in British Columbia. Like many of his fellow Hongkongers, he acted on the expectation that the handover of Hong Kong in 1997 would ultimately lead to systematic integration. Events proved them right.

The Tiananmen Square massacre happened while we lived in Boston. It shocked everyone, especially the significant Chinese student community. It certainly left nothing to be left to the imagination as to whether the system that produced the Cultural Revolution had changed. The colleague from mainland China, a very thoughtful and gentle scientist of middle age, was clearly scarred from that period. Within that framework, the developments in Tibet and Xinjiang are consistent.

The three Taiwanese colleagues went back to their country and contributed each in their own way to the astounding transformation of Taiwan into a prosperous, open and democratic society. Part and parcel of that transformation was the establishment of TSMC (to which Philips had a significant contribution) and its growth to become the world’s largest semiconductor foundry.

TSMC was the first to commercialize ASML’s EUV technology in high volume. Now, since EUV is the dominant force for the future of semiconductors and thus the electronics industry, the US doesn’t want China to get access to this technology. Re-

cently, they even started mulling the idea that immersion DUV lithography should be off-limits to China.

China has been very clear that it will ensure that the future of Taiwan is identical to the one of Hong Kong: full integration. As it looks now, patience, increasing economic entanglement and increasing political pressure aren’t sufficient to achieve this goal within an acceptable time frame, whatever that may mean. Very recently, the US military openly announced that they assume China to use force to accelerate this development within six years.

These kinds of announcements have their own purpose. But what if it does happen this way? What if we wake up to the news that China has invaded Taiwan and taken control of the country? The world economy would get another blow, the stock markets would crash. But most commentators seem to think that no one is willing to go to war over Taiwan. So, we would end up with a situation where China takes possession of the largest semicon foundry in the world, filled with ASML EUV and DUV machines. Does this mean that one should also stop selling these machines to TSMC?

Maybe one can encourage and entice TSMC to build more factories outside of China’s reach and fill these with ASML products. Moral principles, in the end, have precedence over commercial interests. This is, of course, an easy statement to make. Yet, a partial de-globalization of commerce and supply chains appears inevitable if we want to continue living in an open, tolerant and democratic society.

Climate warming is a bigger existential concern to my granddaughter than which political system calls the shots across the globe, but I would hate to see our societal achievements disappear during her lifetime.