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Taiwan Semiconductor Manufacturing Company and other international chip manufacturers have submitted “Request for Information” to the U.S. authorities as required, including information such as a list of major customers, inventory, and revenue share. In the context of the global chip shortage, some commentators said that the US may be taking the opportunity to suppress companies such as TSMC and Samsung, and then support domestic companies in the United States.
Although relevant companies have promised not to disclose sensitive customer information, the information of major manufacturers and Chinese customers will reveal the details of China’s semiconductor development. In the context of the continued high-tech competition between the United States and China, some outsiders speculate that Washington is “sword against China.”
Zhu Yuezhong, an assistant professor in the Department of Finance and Economics of Nantai University of Science and Technology in Taiwan, told the BBC Chinese that the true purpose of the US move is unknown to outsiders, but it is by no means as simple as solving the chip shortage. “It is a possibility to understand China’s demand for semiconductors based on TSMC materials.”
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According to data from January 2021, TSMC has a market value of US$550.9 billion, ranking it among the top ten in the world, and ranking alongside Chinese companies such as Tencent and Apple in the United States.
“Voluntary Act”
On September 23 this year, the United States held a semiconductor supply chain summit to focus on the serious shortage of global wafers. Less than a week after the meeting, the U.S. Department of Commerce required major global semiconductor manufacturers and customers to submit an “information request form” by “filling in a questionnaire”, requesting the submission of relevant data and “improving supply chain transparency.” The deadline for reply is set at On November 8, it was stated that the purpose was to help understand the problem.
The US Department of Commerce has repeatedly emphasized that providing relevant information is a “voluntary act.” At the end of October, the US Department of Commerce stated that companies including Intel, Infineon and General Motors were “willing to provide data” and therefore “encourage other companies to follow suit.”
This immediately triggered a fierce rebound in the global semiconductor industry, especially in Taiwan and South Korea. The Deputy Prime Minister of South Korea once flew to Washington to consult with the high-level Americans.
TSMC issued a statement on Monday (November 8) stating that it has responded to the US Department of Commerce’s request for “semiconductor supply chain risk soliciting public opinion”, but will adhere to its consistent principle and will not disclose specific customer information.
According to the Yonhap News Agency, South Korea’s Samsung Electronics and SK Hynix submitted their chip business information to the US Department of Commerce on the afternoon of the 8th, but the two companies said that neither company submitted sensitive information such as customer data.
U.S. Secretary of Commerce Gina Raimondo told Reuters on the same day that in the past two weeks she personally called the chief executives of all major chip manufacturers in the world, “and each chief executive assured me that they will submit The information we require.” She added: “I hope we will not use the national defense law to require it, but we will use it when necessary… We must have a deep understanding of what happened, where the chips are flowing, and whether there is Hoarding or inventory occurs.”
In Taiwan, there are constant criticisms, with public opinion questioning whether the United States is curbing companies such as TSMC and taking advantage of the opportunity to support domestic American manufacturers such as Intel. For example, Intel’s new chief operating officer Pat Gelsinger (Pat Gelsinger) wrote to the US media “POLITICO” in June this year, emphasizing “America first” and saying that the United States should focus on fostering a homeland like Intel. Chip companies, not foreign companies that only come to the United States to set up factories.
At that time, Lu Xingzhi, a well-known semiconductor industry analyst in Taiwan, issued an article criticizing Intel: “He didn’t regard TSMC as a partner in his heart, competing for the huge subsidies that the US government would provide.”
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Pat Geisinger wrote to the US media “The Politician” in June this year, stating that the United States should focus on fostering native American chip manufacturers like Intel, not foreign companies that only come to the United States to set up factories.
Geisinger recently urged Apple to use Intel’s central processing unit (CPU) again and entrust the foundry to Intel. This is obviously aimed at TSMC, because Apple is one of TSMC’s largest customers. Geisinger also said that Intel will catch up with TSMC in the foundry industry in 2024.
In response to the frequent calls from US companies such as Intel, TSMC Chairman Liu Deyin said in an exclusive interview with Time magazine in October, “Semiconductor localization will not increase the resilience of the supply chain, and may also reduce resilience… The United States should focus on The country’s strengths, such as system design, artificial intelligence, quantum computing and other forward-looking work.”
Alex Capri, a senior researcher at the Lee Kuan Yew School of Public Policy at the National University of Singapore, analyzed the BBC’s Chinese language and stated that the US Department of Commerce not only requires TSMC or Samsung, but also Intel to provide information, without specific specificity.
However, he believes that the United States has promoted the so-called “clean industrial chain” policy in recent years, that is, reviewing the relationship between US companies and customers and the Chinese government and enterprises. This time the US Department of Commerce’s requirements should be related to these.
Capri said that US companies still control the development of the global semiconductor industry. For example, IC design, semiconductor design equipment, and procurement contracts, so the United States and TSMC are in need of each other. He said: “The strategic cooperation between the two parties is still deepening…Taiwan and the United States are currently deepening the close relationship in regional security… But the strength of the United States to foster American companies such as Intel is also accelerating. Doubt.”
He analyzed that the United States will indeed spend a lot of time and money to continuously support the development of US semiconductor companies, but this does not mean that the United States wants to hinder TSMC. Instead, it uses information provided by major manufacturers to understand the needs of Chinese companies for chips, etc. , Continue to compete with China.
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Sword refers to China?
According to the survey agency TrendForce, TSMC’s global market share in foundry was 52.9% in the second quarter of 2021, and South Korea ranked second with 17.3%.
China is also the second largest market for TSMC, accounting for 15% of its revenue. The United States is TSMC’s largest market, accounting for approximately 58% of the latter’s revenue. Therefore, in the context of the continuing intensification of the US-China trade war and national security considerations, “chip supply cut” has always been a means used by the United States to deal with China.
For example, in May 2020, TSMC has announced that it will no longer be its second largest customer, and China’s semiconductor leader Huawei has foundry chips. Before the US sanctions, Huawei had been TSMC’s second largest customer, second only to Apple. In 2019, Huawei accounted for 14% of TSMC’s revenue. In 2021, Huawei mobile phones suffered heavy losses after TSMC “cut off supply”.
Therefore, the U.S. requested TSMC and other companies that have close relations with China to submit information consent forms on the grounds of investigating “chip shortage” and “who is hoarding chips”, which was interpreted as a stab at China by all walks of life.
Through these data, the United States is estimated to be able to determine which semiconductor manufacturers in China are currently developing rapidly, as well as the needs of these companies, or the shipment cooperation with TSMC. The media also believe that the US also wants to know the actual data of the chips that Huawei has stocked from major manufacturers such as TSMC before and after the sanctions.
Stewart Randall, director of the electronics department of Shanghai consulting firm Intralink, analyzed to the South China Morning Post that the requirements of the US Department of Commerce “may help the United States understand where to allocate its resources appropriately to improve its spending efficiency.. …. For example, to understand the changes in the level of equipment and material procurement by these companies in the past three years, to help the US determine whether buyers are abandoning Chinese suppliers, to understand which products are in greatest demand, and to let the White House understand how US companies can Gained the advantage.”
Chinese science and technology news commentator “Wujiyama” analyzed that the U.S. obtains Chinese customer information from TSMC to assist the White House “this is to determine which Chinese chip design companies have good technology and great development potential, and need to be focused on containment. This is for China’s booming chips. The design industry is a big threat.”
So far, Beijing has not publicly commented on the US Department of Commerce’s request.