Security Implications of the Taiwanese Chip Industry Migration to China.

This paper summarizes preliminary findings of a sectoral empirical case study that explores the impacts of contemporary globalization on national security. The case focuses on the Taiwanese semiconductor industry migration to China, as part of the continuous globalization of the chip sector, and the extent to which such a globalization process, under certain conditions, may pose security challenges to the United States, Taiwan and China. The paper is composed of four sections. The introductory section explains why it matters to adopt a sectoral approach to the study of globalization's impacts on security and why it matters to focus on the chip industry in the proposed study. The section further defines key concepts of globalization and security as used in the paper, identifies inadequacies in the existing literature, and highlights the significance of the proposed research undertakings. The second section explains rationale behind the methodological choice for the study, and summarizes strategies used to ensure interview access, data representativeness and data reliability. Using evidence collected in more than 140 in-depth interviews with a wide range of chip industry, defense sector and government insiders in the US and Asia, as well as English-language and Chinese-language secondary data, the next two sections dissect the empirical data in two major areas: the sectoral migration and the security implications. On sectoral migration, it is argued that the scope of the migration is extensive, the direction complicated, the cause multiple, and the outcome significant in boosting the indigenous Chinese chip industry development. The ways in which non-state actors of Taiwanese firms and individuals have violated government regulations in order to migrate to China are also identified. As for the ensuing technological and defense security ramifications, it is argued that there is no immediate security risk involved; long-term security challenges, however, may emerge taking into account two intervening factors. They involve the technological change in the sector concerning spin-on prevalence and dual-use nature of the chip technology, as well as the PRC grand strategy behind its resolve to establish a solid indigenous chip industry. These long-term security challenges are chiefly linked with three conduits of influence: the defense industrial base and the PLA modernization, technological security risks, and the dubious export control policy implementations. The concluding section argues how and why empirical findings presented in the previous sections deepen our understanding of globalization's impacts on security as far as the agency and scope of security, the autonomy and capacity of the state, as well as the balance of power are concerned. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]