Reading China’s Global Times newspaper is like tuning into the id of a bunch of 15-year-old boys eager to blow something up with M80s. The fact that all of this is state media which means it’s basically a thinly veiled account of whatever China’s propaganda department wants said is what makes it worrisome. Today the Global Times published a story which is clearly intended to read as a warning to Taiwanese chip maker TSMC.

The CEO of Taiwan Semiconductor Manufacturing Company (TSMC) reiterated at a technology symposium on Tuesday that its ultra-advanced 3-nanometer chip production technology will be put into mass production “soon,” Nikkei Asia reported. The comment came about one month after Samsung Electronics said it has succeeded in mass producing 3-nanometer chips, making the South Korean giant the first chipmaker in the world to reach the milestone.

As transistors get smaller and smaller, traditional miniaturization techniques are reaching their physical limits. Some industry insiders believe 2-nanometer may be the ultimate battle in the field of silicon semiconductor chips, before the world enters a graphene age of industrial revolution. The question now is: any chipmaker has to win a competition for the 3-nanometer chip if it wants to beat rivals in the ultimate 2-nanometer technology race. TSMC and Samsung Electronics are considered the main contenders of global competition in the 3-nanometer technology.

Before we move on to the pay off to this, it’s worth noting that the various nodes of production which are labeled 6 nanometer, 5 nanometer and now 3 nanometer have no real connection to the size of the transistors. The only thing that’s true about it is that the transistors do get smaller and less power hungry with each iteration. But no part of a 3nm node transistor is precisely 3nm wide. Basically this is just a big marketing convention that has developed over time. Anyway, the Global Times doesn’t care about any of that, it cares about politics and making threats.

In the current fierce international competition, any player choosing to abandon the mainland [Chinese] market will likely have a pressure over its capital supply chain and will eventually be defeated by its rivals.

As tensions escalated across the Taiwan Straits as a result of the Democratic Progressive Party (DPP)’ secessionist words and deeds, many have begun to care whether TSMC will be affected. The DPP authorities may think the island’s semiconductor manufacturing sector is a trump card that can be used to advance its secessionism, but they have largely overestimated the capabilities…

Without a peaceful and stable environment, the chipmaker’s global position will surely be weakened or even lost, not to mention its ambition in 3-nanometer chips. If tensions escalate in the Taiwan Straits, TSMC may have to run against a stronger headwind than it did during the 2008-09 financial crisis.

When the Global Times talks about abandoning the Chinese market what they mean is that China would stop purchasing TSMC’s chips if they decide it’s necessary because the free people of Taiwan are getting a little too full of themselves and their freedom, i.e. what China calls secessionism. And the final paragraph is the warning. If things are “peaceful and stable” TSMC could be cut off from sales to China. In this case, peaceful and stable means going along with whatever China wants them to do. In so many words, nice company you got there, be a shame if something bad were to happen to it.

Could China really live up to this threat? Most of the chips China is importing from TSMC are used to produce products that are then sold on to places like the United States. For instance, TSMC produces chips used in Apple’s phones. So the only way China could disrupt that supply is by also disrupting its own exports which keep its businesses running. Would they really inflict that kind of damage on their own economy intentionally?

President Xi Jinping, who will start an unprecedented 3rd term in October has already shown he’s willing to wreak havoc on his economy in order to maintain his increasingly untenable zero COVID policy. So maybe China really would take the hit to bring Taiwan under its control. That doesn’t sound rational but in this case it’s really just one person making all the decisions. It’s not as if he has to convince a room full of people at this point. Granted I do think this is all propaganda but it does make you wonder just how rational Xi Jinping is planning to be when it comes to Taiwan. No doubt making people in the US wonder about that is the whole point.