ASML, TSMC can shut down equipment if China invades Taiwan: Rpt.

Chip companies ASML (ASML) and Taiwan Semiconductor Manufacturing Company (TSM) could disable their chip machines remotely if China were to invade Taiwan, according to a report from Bloomberg. The report states that US government officials have expressed concerns to Dutch and Taiwanese officials about what could happen to the semiconductor space if China aggressively escalates tensions with Taiwan (ASML is a Dutch company).

Yahoo Finance's Akiko Fujita breaks down the report.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Stephanie Mikulich.

Video transcript

Chip giants a MA, SML and TS MC can disable their chip making machines in the event that China invades Taiwan.

That is, according to reporting from Bloomberg now this comes amid heightened geopolitical tensions in the region and concern from US officials about escalation for more.

We bring in our own Akiko fit.

Yeah, Matty.

As you reported Bloomberg News, saying that both equipment maker A SML, as well as chip maker Taiwan Semiconductor have assured US officials that they have the ability to shut off their operations remotely.

In the case of any kind of attack from China on Taiwan, the big concern centres around a S MLS extreme ultraviolet machines are what's known as EU VS.

These are machines that are capable of manufacturing the most advanced chips used in the military, and artificial intelligence is the only company that makes these machines.

Which is why there is so much concern about this falling into the hands of the Chinese Bloomberg, reporting that the company can remotely shut off the machines.

It has what amounts to a kill switch in any case of a conflict, and the report suggests that there has been a lot more game planning around a potential conflict than we previously known.

The Dutch government has reportedly run simulations with a SML on how to protect these assets in the case of a possible invasion and shared those plans with US officials.

Now it's worth noting again that the reason there's been so much focus on protecting these advanced chips in Taiwan it's because the country, specifically TS MC, manufactures nearly all of the world's most advanced chips.

The U has aggressively moved to block Chinese access to these ships and chip making equipment, establishing some of the most stringent export controls.

China has been pouring billions of dollars into developing its own chip making capabilities to counter those export controls.

But most experts, I have spoken to say they believe China is still many years away from catching up with the likes of the US and Taiwan.

Now, the timing of this report certainly we should say it is timely.

Because Taiwan's new president yesterday was sworn in.

He has forcibly pushed to maintain Taiwan's independence publicly, saying yesterday that Taiwan must demonstrate, in his words its resolution to defend the nation, and there are concerns now with that new leader in place.

China can start to ramp up some activity to rattle the territory.

All right, Akiko, thank you so much.

As always for joining us.

We really appreciate it.