Photographer: Billy HC Kwok / Bloomberg
Photographer: Billy HC Kwok / Bloomberg
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Taiwan Semiconductor Manufacturing Co., the world’s largest chip maker, has warned for the first time that trade tensions could disrupt its access to key production equipment and affect its operations amid growing friction between the United States and China.
The company, which produces semiconductors for Apple Inc. and other major global technology companies, it said in its annual report published on Friday that “ongoing trade tensions or protectionist measures could lead to rising prices or even the unavailability of key equipment”. It indicated factors such as delays or refusals of export licenses, additional export control measures and other tariff or non-tariff barriers.
TSMC relies on equipment from US suppliers, including Applied Materials Inc. and Lam Research Corp. for production. The company said that trade tensions could also prevent it from securing the raw materials needed for production, repeating a point it mentioned in the previous annual report.
Semiconductors have become a key area of growing US-China competition with chips used in a wide range of products, from missiles and cars to smartphones. China is eager Encourages Domestic Semiconductor Industry to Reduce Dependence on Foreign Technology as US Strengthens Control of Chip-Related Exports to Asia, Including Key Equipment sales to Chinese chip manufacturer Semiconductor Manufacturing International Corp.
Earlier this week, two U.S. Republican lawmakers – Texas MP Michael McCaul and Arkansas Sen. Tom Cotton – urged state and trade departments to find a better way to “mitigate the risk of Taiwanese companies providing services and technologies to entities of concern,” adding that TSMC should not make advanced chips for the Chinese military.
The South China Morning Post reported this week that TSMC has suspended new orders from Tianjin Phytium Information Technology Co., one of the blacklisted companies in the United States, is concerned with either the construction of supercomputers used by Chinese military actors and its efforts to modernize the military or destroy weapons.
The Taiwanese chip maker has warned that new measures taken by China to counter US sanctions could affect its operations. In January, China adopted a blockade statute that “allowed Chinese entities that suffer damage from a multinational’s compliance with foreign laws to seek civil remedies,” he said.
“Measures taken by an affected country to counteract the impact of another country’s actions or regulations could lead to significant legal liability for multinational corporations, including our own,” the TSMC said in the report.
Read more: China is pushing back against US sanctions with new rules