Apple’s Disaster Scenario Is A Real Possibility, US And British Security Services Say: Chinese Takeover Of Taiwan – 9to5Mac | Hot Mobile Press

Back in March, we warned of Apple’s catastrophic scenario: China’s takeover of Taiwan. Yesterday the heads of the US and UK security services issued an “unprecedented” warning that not only is this possible, but that China has taken steps to prepare.

If it were to happen, it would result in an almost total disruption of most of Apple’s manufacturing resources…

Status of Taiwan

Taiwan’s status depends on who you ask. The Chinese government considers the island a territory of its own country. Taiwan, in turn, still technically claims control of mainland China but takes no practical steps to wield power, content to consider itself an independent nation.

Taiwan has its own constitution, elections, passports, currency and armed forces.

However, China refuses diplomatic relations with any country that recognizes Taiwan’s independence, so most Western countries play an awkward game of pretending they don’t by having “representative offices” on the island – dedicated only to that Names are after messages.

Why a Chinese takeover of Taiwan hasn’t happened yet

The threat of a violent Chinese takeover of Taiwan was ever-present. One of the most important deterrents, however, was the American Taiwan Relations Act. This creates a legal obligation for the US to help Taiwan defend itself against a Chinese invasion.

China’s invasion of Taiwan was thus viewed as a potential World War III scenario in which China would engage in armed conflict with the US.

Why the risk is now

As we noted back in March, the global response to Russia’s invasion of Ukraine showed China that while it could face economic risks from an invasion of Taiwan, it was unlikely to face military risks.

Yes, the US is theoretically obligated to help Taiwan defend against an invasion, but there is what some have called “strategic ambiguity” in the wording of the law. Given exactly the same risk of escalation to nuclear war with China as with Russia, the prospect that the US would do very little in practice always seemed likely.

And right now, with the invasion of Ukraine, China has pretty solid evidence that Western military intervention would be unlikely if it did the same in Taiwan.

MI5 chief Ken McCallum and FBI director Christopher Wray have now specifically highlighted this risk as one of several threats posed by China.

UK and US security chiefs are making an unprecedented joint appearance to warn of the threat from China […]

The FBI’s Wray warned that if China took Taiwan by force “it would constitute one of the most horrific business disruptions the world has ever seen.”

Wray said this is far from a theoretical risk – China has already taken some preparatory steps.

“We have seen China looking for ways to protect its economy against possible sanctions and trying to protect itself from harm if it does anything to draw the ire of the international community,” Wray said. “In our world, we call this type of behavior a cue.”

The pair said China has already demonstrated its willingness to risk global conflict through cyberattacks, industrial espionage and electoral interference.

Apple’s Disaster Scenario

This would be Apple’s disaster scenario for two reasons.

First, the Cupertino-based company is heavily dependent on Taiwan itself. The A-series, M-series, and S-series chips are all manufactured by Taiwan Semiconductor Manufacturing Co (TSMC). Almost all production takes place at the company’s factories in Taiwan. An armed conflict would have devastating effects on the country and its people, including massive disruption to production.

Second, it is inevitable that the US and the rest of the world would respond to a Chinese takeover of Taiwan the same way they responded to the Russian invasion of Ukraine: sanctions.

If these sanctions were as sweeping as those against Russia, Apple would no longer be able to give business to Chinese companies — where the vast majority of Apple products are made.

iPhones, iPads, Apple Watches, Macs — you name it, by far the largest volume of any Apple product is assembled in China, with many components also manufactured there.

It’s impossible to overstate the threat this would pose to Apple, and the fact that the heads of MI5 and the FBI have – for the first time – described this scenario as a real and present danger must have chilled senior officials the company.

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