Tim Cook reportedly said he slept ‘with one eye open’ after CIA briefing – image credit: Apple
Apple CEO Tim Cook fell asleep after being informed by the CIA four years ago that China would move into Taiwan by 2027. Not enough has been done about it yet with that day approaching.
Apple has moved some manufacturing to the US in initiatives that have been known for years. But now according to The New York TimesApple and others also had a secret CIA briefing warning of how precarious chip manufacturing was in Taiwan, but they ignored it.
Apple’s Tim Cook, Nvidia’s Jensen Huang, Advanced Micro Devices’ Lisa Su, and Qualcomm CEO Cristiano Amon were briefed in July 2023. After the briefing, Apple’s Tim Cook reportedly said he slept “with one eye open”.
That’s a measure of how dependent Apple is on Taiwan’s TSMC, as well as how compelling the briefing was. The briefing reportedly focused on how China’s military spending suggested an attack was possible.
Still, according to the report, none of the technology leaders took the hint and moved production out of Taiwan in significant numbers. There are reasons, including an estimate that if the US were able to produce enough processors, they would cost about 25% more than Taiwan processors.
The sheer extent of the dependence on TSMC makes it hard to accept that this could change. There are also huge challenges for Apple in bringing manufacturing back to the US, with the lack of skilled labor, the scarcity of rare earth minerals and the general reluctance of the US workforce to accept minimum wage for highly skilled work.
In October 2022, TSMC said that US attempts to revive the semiconductor industry were doomed to failure. TSMC and Taiwan naturally don’t want sales to move to the US, but then there was also what’s called the “Silicon Shield”.
This is the argument that the US is so dependent on Taiwan that it would protect the country if China attacked.
It’s not just the US. Taiwan is key to the entire world economy. In 2022, ahead of a briefing for technology leaders, the US government calculated that Taiwan is key to about $10 trillion of the world’s gross domestic product.
A confidential report with the figure also said that if China were to take over Taiwan, the US gross national product would drop by $2.5 trillion. But then China would drop by $2.8 trillion.
The expected damage to the Chinese economy may also have convinced businessmen that the country would never attack Taiwan. But then in February 2022, Russia invaded Ukraine despite predictable economic losses.
Economic crisis
The idea of a “silicon shield”, the problems of resuming production and the question of whether China could afford to attack Taiwan certainly have their logic. But if China were to attack, it would mean the biggest economic crisis since the Great Depression.
Reportedly, many of America’s largest technology firms would have enough stockpiles of processors to see them through several months of conflict. But Apple might not – it works brilliantly on a very tight Just In Time process, which means it has a 30-day supply of components at the most.
Steps of Apple
As recently announced, Apple is working to bring Mac mini assembly and manufacturing to the US. Apple has also always invested in the US, but most recently boasted of spending $600 billion in the country.
However, this investment is trivial next to what would be needed – and it was as much PR as anything else. Tim Cook announced this and other manufacturing investments in a clear move to appease Trump.
But in truth, only a small part of the investment was actually new. Almost all of the investments reported were what had previously been reported separately.
Trump (left) urges Tim Cook (right) to move manufacturing back to the US
It’s a series of good investments grouped together to look better. That appeased Trump, it did the job it was intended to do.
But that’s not enough to mean that Apple is actually a little less connected in Taiwan.
At the same time that Apple announced a commitment to invest in the US, TSMC itself did the same. By January 2026, TSMC has invested $165 billion in the US.
That was in a series of manufacturing plants that were built in Arizona, and the company plans at least one more. However, currently, processors that can be manufactured in Arizona cannot be as complex as those manufactured in Taiwan, nor can they use the latest manufacturing technology due to Taiwanese laws.
There have also been reports that the Arizona-made processors still need to be shipped back to Taiwan for completion. That may eventually change thanks to Apple’s partnership with Amkor, with a timetable measured in years for the shift, not months.
So if China were to attack Taiwan and come into conflict with the US, TSMC’s Arizona plants will not make the situation any easier.
Apple has not yet publicly commented on this The New York Times postponement. And it probably won’t say anything of substance when it does.
China’s position
China’s problem is that its government insists that Taiwan is part of its territory, while Taiwanese officials disagree. This led to incidents such as China blocking the supply of Apple components if they were labeled “Made in Taiwan” instead of “Taiwan, China”.
The US does not formally recognize Taiwan as a sovereign state. This resulted in Apple supplier TSMC being taxed twice on revenue from its Arizona plants.