U.S. firms’ purchases of computer chip-making machines from Taiwan rose to a record high in March as the United States continues to rebuild its domestic semiconductor industry.
Taiwan Semiconductor Manufacturing Co. (TSMC) and several other major producers in Taiwan are vital players in the global supply chain of computer chips.
Exports to Mainland China slumped by 33.7 percent, marking a ninth straight month of decline, as tensions have risen with Beijing.
Taiwan’s diminishing exports of chip machines to China is one sign that a technological war between the two largest economies is heating up.
Strategic concerns about the island’s vulnerability, which the Chinese communist regime claims as a renegade province, prompted steps by U.S. officials to move more advanced chipmaking equipment to the United States.
Chip Factories in US
TSMC will build two fabrication plants in Arizona for $12 billion, backed by state subsidies and local government support.The company announced plans in 2020 to build the first production facility, which is expected to be fully operational by 2024 and will initially make 20,000 wafers of relatively advanced 5-nanometer (nm) chips per month.
TSMC’s second plant in Arizona will make more advanced 3-nm chips.
The White House is using $50 billion in subsidies via the CHIPS and Science Act to bolster domestic semiconductor manufacturing. TSMC is likely to receive billions in subsidies from the legislation.
Denying CCP Access to Sensitive Technology
Beginning with the Trump administration, the U.S. government has been pushing a worldwide effort to limit China’s access to sensitive semiconductor technology and the tools to make them.The Biden administration has continued the attempt to limit Beijing’s ability to acquire advanced technology and products, which could be used for espionage and military purposes.
U.S. suppliers such as Applied Materials Inc., Lam Research Corp., and KLA Corp. have been banned from sending some of their most advanced technology to China.
The Dutch minister for foreign trade and development cooperation, Liesje Schreinemacher, told the Dutch parliament on March 8 that the proposed limitations on Chinese Communist Party (CCP) access to sensitively designed advanced equipment using ultraviolet light to etch circuits on processor chips was essential on security and human rights grounds.
Last month, Japan also agreed to place new restrictions on exports of 23 types of leading-edge chipmaking technology.
After much hesitancy, other nations in Europe are increasingly on board with keeping the world’s second-largest economy from having access to its closely guarded chip technology, while slowly trying to ramp up their own chip production.
Crash CCP Program
Beijing has complained about the restrictions, saying they threaten the stability of the global supply chain and that national security justifications were bogus.The Chinese have so far been slow to retaliate against U.S. tech companies—likely to avoid disrupting domestic industries that produce most of the world’s smartphones, tablet computers, and other consumer electronics.
However, CCP leader Xi Jinping accused the United States in a speech last month of trying to block China’s development with a campaign of “containment and suppression” and called on the party to “dare to fight.”
Xi has ordered his government to put a major emphasis on producing more advanced computer chips, which are used in everything from smartphones to fighter jets.
Beijing has its own chip foundries but can only produce lower-end processors used in cars and appliances.
The Chinese are forced to import more than $300 billion worth of advanced chips from abroad each year.
The CCP has been pouring billions of dollars into the development of its semiconductor manufacturing sector and to reduce the need for foreign imports as its push to gain global dominance heats up.
