What did the CIA tell Tim Cook that frightened him so much he slept with one eye open?
During a meeting, Apple CEO Tim Cook was warned by the CIA about a military scenario that could crush tech companies.
Apple CEO Tim Cook was frightened by a CIA warning. | Image by Apple
A report published in The New York Times this past week says that the CIA and other tech executives were invited to a classified CIA briefing that took place in a secure room in Silicon Valley in 2023. The subject of the briefing had to be chilling to Cook who had to hear from the CIA that China could attack Taiwan by 2027. That has long been a concern to Apple since the company sources 100% of its custom processors from Taiwan Semiconductor Manufacturing Company (TSMC).
China might have its eyes on TSMC
Any attempt by China to invade Taiwan will surely include an attempt to take control of TSMC. The latter is the world's largest contract foundry, and China has long sought to be self-sufficient in semiconductor production, a goal that has been out of reach due to U.S. sanctions.
From time to time we have discussed this subject. In May 2024, we told you that then-Commerce Secretary Gina Raimondo warned that a China takeover of TSMC would be devastating to the U.S. economy. That year, a report from Bloomberg said that if China invades Taiwan, advanced lithography machine manufacturer ASML has plans to remotely disable the Extreme Ultraviolet (EUV) lithography machines that mark circuitry patterns on silicon wafers.
Apple will reportedly purchase 100 million chips this year that were made in TSMC's U.S. fab
Secretary Raimondo was said to be the driving force behind the extraordinary meeting. The commerce secretary was unhappy with the tech industry's hesitancy to move the source of their processors out of Taiwan. TSMC has built production facilities fabs in Arizona. Fab 1 builds chips using TSMC's 4nm and 5nm process nodes, a generation behind the currently most advanced 2nm process nodes. Rumors call for Apple to purchase 100 million chips from this fab alone in 2026 even though prices are 25% higher.
Inside of a TSMC fab in Taiwan. | Image by TSMC
The second TSMC fab built in Arizona, equipped to produce chips using TSMC's 3nm process node, should start mass-production in late 2027. This facility was originally scheduled to start operating in 2028. Heavy demand from TSMC's clients such as Nvidia, Apple, and AMD has forced the company to move up the production timeline for Fab 2. Ground has been broken for Fab 3, which is expected to mass-produce chips using TSMC's 2nm and A16 (1.6nm) process nodes.
But even if TSMC turned to its U.S. fabs in the case of an invasion by China, it would only be able to replace a low single-digit percentage of current production. So the math doesn't really work out, which means that the U.S. fabs built in Arizona will not save TSMC, Apple, or the U.S. economy in the event of an invasion.
Should tech firms worry about China taking over TSMC?
During the 2023 meeting, those making a presentation in front of the tech executives included CIA director William Burns and director of national intelligence Avril Haines. Both reportedly discussed the latest intelligence on China's military plans to Cook and other CEOs including Nvidia's Jensen Huang, AMD's Lisa Su, and Qualcomm's Cristiano Amon. The scenario presented by Burns and Haines was so dire that Tim Cook admitted that after the meeting he slept "with one eye open."
What could happen to the U.S. economy if access to Taiwan fabs are lost
This is pretty frightening stuff, especially when the CEO of one of the world's most important tech companies is obviously rattled by what he heard. A confidential report written by the Semiconductor Industry Association and reviewed by The New York Times said that should the U.S. lose access to Taiwan's foundries, the result would be the largest U.S. economic disaster since the Great Depression. GDP, the total output of goods and services in the country, would drop by a whopping 11%.
Apple last summer said that it would invest $100 billion in the U.S. Some money will go to TSMC and other chip manufacturers. Part of the investment will go toward building facilities that will allow Apple to build more products in the U.S. It has been a goal of President Donald Trump to have Apple build an iPhone in the U.S., which is something he talked about before being sworn in for his first term in 2017.
But as the president can see from the production of the Trump T1 Phone, which was to be built in the U.S., assembling advanced smartphones in the U.S. is hard to do. The Trump Mobile website now says that the device features an "American-Proud Design."
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