TSMC founder says he supports US efforts to slow China's chip advances

Posted by IDQWE001 > 2023-03-18 06:32 | Report Abuse

TAIPEI, March 16 (Reuters) - The retired founder of TSMC (2330.TW) said on Thursday that even as he supported U.S. efforts to slow China's advances in the semiconductor industry, the "bifurcation" of the global supply chain and the reversal of globalisation would increase prices and reduce the ubiquity of chips that power the modern world. "There's no question in my mind that, in the chip sector, globalisation is dead. Free trade is not quite that dead, but it's in danger," Morris Chang said, speaking at an event hosted by Taiwan's CommonWealth Magazine. "When the costs go up, the pervasiveness of chips will either stop or slow down considerably," said Chang, who at 91 remains an influential voice in Taiwan's chip industry. "We are going to be in a different game." In Taiwan, TSMC, Asia's most valuable listed company and a major Apple Inc (AAPL.O) supplier, is widely regarded as the "sacred mountain protecting the country," because of its economic importance. China has in recent years ramped up diplomatic and military pressure against Taiwan, which Beijing views as its territory, raising concerns about the fate of the chip fabs that dot Taiwan's western coast and produce the majority of the world's most advanced chips if China blockades or attacks the island. U.S. "onshoring" and "friendshoring" efforts to boost chip manufacturing stateside or in allied countries present a predicament for Taiwan. "Friendshore does not include Taiwan. In fact, the commerce secretary has said repeatedly that Taiwan is a very dangerous place, we cannot - America cannot - rely on Taiwan for chips," Chang said. "Now that, of course, is I think Taiwan's dilemma." TSMC is expanding its global production footprint, even as it keeps its most advanced technology in Taiwan. Late last year, TSMC began construction of a second chip factory in Arizona which will start production in 2026, using advanced 3 nm technology. The company's total investment in the U.S. project amounts to $40 billion. Meanwhile, the Chinese government is plowing billions into bolstering its chip sector, but Chang said China's chip manufacturing technology lags that of Taiwan by "at least five or six years".

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Tech war: China's chip imports slump 27 per cent in the first 2 months of 2023 as US sanctions bite

China's chip imports slumped 27 per cent in the first two months of 2023 by volume, according to China's customs data published on Tuesday.

China imported 67.6 billion integrated circuits (IC) in January and February, down 26.5 per cent from the same period last year, according to data released by the General Administration of Customs. The drop was steeper than the 15.3 per cent decline recorded for all of 2022, which was the country's first annual fall in IC imports in two decades.

The total value of the imports also tumbled 30.5 per cent to US$47.8 billion, down from US$68.8 billion last year. Chip prices are down this year owing to a supply glut and a slowing global economy, a reversal from a year ago when prices were still rising as the market recovered from the 2021 chip shortage.

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Posted by IDQWE001 > 2023-04-17 18:41 | Report Abuse

China is also facing fewer options for imports as the US has escalated export restrictions on advanced chips - especially those with artificial intelligence applications such a Nvidia's A100 graphics processing unit (GPU) - and the country has ramped up domestic production of semiconductors using mature process nodes.

In the first two months of 2022, China's total volume of chip imports decreased by just 4.6 per cent year on year to 92 billion units, while the total value of imports increased 19.2 per cent. Chinese Customs typically combines trade data for January and February, when trade flows often slow due to the Lunar New Year holiday.

China's IC exports fell 20.9 per cent year on year to 37.3 billion units in the two months, compared with a 0.5 per cent increase in a year ago. The total value of the exports dropped 25.8 per cent.

The latest figures reflect the mounting pressure on China's semiconductor industry as the US seeks to curtail its geopolitical rival's access to and ability to produce advanced chips and chip-making equipment.

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Last October, the Bureau of Industry and Security, an agency under the US Department of Commerce, significantly escalated those restrictions with an update that also targeted China's ability to develop and maintain supercomputers and manufacture advanced semiconductors used in military applications, including weapons of mass destruction.

The US has also reportedly reached an agreement with Japan and the Netherlands in January to coordinate on export controls against China covering certain chip-making equipment, such as ArF Immersion deep ultraviolet lithography machines.

Semiconductor Manufacturing International Corp, China's largest chip maker, warned in February that mass production at its new US$7.6 billion plant in Beijing could be postponed by one to two quarters owing to difficulties in obtaining equipment.

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