Let's just start with the basics of this whole situation. TSMC, the sort of crown jewel of Taiwan's technology industry, having success early in the US and the support of the US to do it in the context of China. That's a difficult one. That's right. This is really very good news. And it means that the Biden policy of both having some tough export controls on certain very small critical technologies, but also these subsidies. I think TSMC got 6 billion in subsidies, 5 billion in loans. Other companies are getting similar that. Project of pushing our semiconductor industry forward is actually working. We come to you because of your rich experience when it comes to foreign policy, the work that you do with the Aspen Strategy Group, the work you've done with the US government thus far. Do you would you grade this focus of the United States on on shoring of chip supply from an to a D they surpassing

expectations. It's a good question. I would give it about an A-minus. So, the important thing is to keep our eye on the long-term ball. There are certain key technologies where the U.S. and our friends and allies should stay in the lead. We should be more advanced than the Chinese, who are becoming more and more competitors in that space. We do that in two ways: by slowing them down, that's the export controls, and by speeding ourselves up. My personal view is that we've done pretty close to what we can do to slow the Chinese down their rate. Entrepreneurs themselves, we've had some very tough export controls on the most advanced chips and also on the tools that make the chips. Making those controls even tougher unilaterally on the U.S. side won't slow China down. It just means our companies won't have the revenue that they need to fund the research and development to keep ourselves in the lead.

Let's just set the context of this week as well, because there were some hiccups, shall we say, to the US focus on containing semiconductor expertise, limiting it from going into Chinese hands in particular. We hear that TSMC has had to admit that somehow its chips are working their way into Huawei's products, even though Huawei has been cut off in theory since 2020. News today that our chip technology said it has no direct or indirect business dealings with Huawei. Of course, many trying to work out how and which client of TSMC allowed the chips to get into the hands of Huawei. But how effective can these limitations really be on you? That's a perfect question. And this example shows exactly how difficult it is. You know, there are lots of well-meaning people in the US government, in European governments, trying to get this right and trying to make the controls narrowly

focused and effective. Very, very hard to do. I think they're doing quite a good job. I worry, however, that, for example, you see some folks in the might go into a Trump administration very tough on China, China hawks saying, well, we're just going to control more. We're going to put more companies on the entity list. And as you're seeing with this TSMC example, even when people are well-meaning, it's just very, very difficult to do things with controls alone. You got to run faster. Which is more powerful then we've covered the export controls part of this story deeply on this program, but they almost work in parallel. You sort of can't have one without the other. If your end goal is to make your own nation more competitive in any given field or domain. That's absolutely right. I'm firmly on the side of running faster is better.

We have an amazing innovation engine. I live out here in California. You all report on it all the time. We're doing great. So we need to make sure that engine keeps running and keeps running fast. One of the things that's underappreciated, everyone always talks about the CHIPS Act, the subsidies to semiconductor fabs. What they don't talk about so much is that there were supposed to be $170 billion going into basic science R&D funding. This is really important. This creates all of the technologies of the future, you know? Okay. So theory gaps. And so those are the things we should be doubling down on. And yet at the same time, China is taking its own action. How closely do you follow and assess that response to the TSMC situation? But China is great. They're doing a lot of innovating. Their companies are excellent. If you look at, for example, what they're doing on artificial

intelligence, they're large language models. The biggest models and I are depending on who you ask, three, six, nine months behind because of our chips controls. But on certain other parts of artificial intelligence, computer vision, surveillance, drones, they're really first rate. So the Chinese are going to keep running fast. And I would just say one thing. This policy needs to be nuanced. It's not like we're competing with China on absolutely every technology. There are certain areas where we should still collaborate on health care, tech, on other things. It's just those things that touch national security that are really sensitive, that can be dual use, where we need to be more careful. Push us forward then, no matter what the administration after November 5th sake, will there forever be this idea of tension and ultimately opposing nations between China and the U.S. when it comes to A.I.? Do you see any grounds for a more dovish approach?

Yeah, I do think we are entering a phase where the Chinese government, led by Xi Jinping specifically, has said they want to advance in certain technologies: AI, semiconductors, 5G, and certain others. They've set this out in a plan, and they want to have a very dominant military. And those two things are quite worrying, understandably so, to the U.S., Europe, and our friends and allies. And so I do think no matter who wins our election, this part of the technology race—and I don't call it a war; I call it a tech race—is going to continue. This is a big long-term push that's going to continue. That doesn't mean, however, that the U.S. and China can't do business together in lots of other areas. When I see companies in the consumer sector and agriculture and other places still doing a lot of work with China, it doesn't mean that there has to be a

TSMC's Arizona Plant and US Chip Ambitions

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