Regarding your first question:

>The reason this matters is because chips matter for many use cases outside of PCs and servers — Intel’s focus — which is to say that TSMC matters. Nearly every piece of equipment these days, military or otherwise, has a processor inside. Some of these don’t require particularly high performance, and can be manufactured by fabs built years ago all over the U.S. and across the world; others, though, require the most advanced processes, which means they must be manufactured in Taiwan by TSMC.

>This is a big problem if you are a U.S. military planner. Your job is not to figure out if there will ever be a war between the U.S. and China, but to plan for an eventuality you hope never occurs. And in that planning the fact that TSMC’s foundries — and Samsung’s — are within easy reach of Chinese missiles is a major issue.

Regarding your second question, what companies and countries do you have in mind?

For the second question I meant: if everyone is trying to build chips at home, at best we get an expensive and inefficient arms-race for subsidies. At worst we get trade-wars or actual wars.

I think that rationale would apply to some other countries, but not all. For example, Japan should want to maintain a viable semiconductor manufacturing capacity (and might be at risk, currently). Now obviously Luxembourg cannot. Where exactly in between the size of Japan and Luxembourg one draws the line is a tough question, but probably western Europe has at least a couple countries (Germany, France, UK) who are big enough.

Lower-income countries like Brazil, South Africa, Argentina, India probably want to, but may have to work their way up to that; it's an expensive business to be in.

I notice that China has absolutely made it a top priority to try to get into this, despite having some difficulty doing so.

Because you can't make war without chips. During war, global supply chains are cut off. And if you can't make war, then you can't have a global order on your terms. Instead, you have a global order on the terms of the Chinese. They become powerful and rich. You (and your allies) become weak and poor.

You make chips in the US for the same reason you make nukes in the US.

It applies to other countries only insofar as they want to be independent. Most Western countries can shelter under the US umbrella. Again, same as with nukes.

> Instead, you have a global order on the terms of the Chinese. They become powerful and rich. You (and your allies) become weak and poor.

Free trade has been the proven way to become rich (and thus powerful).

Free trade needs a policeman. It was Britain, then America. Global free trade run by the Chinese will not be the same as free trade run by the US.