Taiwan’s TSMC, the world’s largest foundry company, notified Chinese chip design corporations that it might stop producing cutting-edge artificial intelligence (AI) chips. That is analyzed as a move that takes into consideration the potential of policy changes at a time when the change of presidency in the US is confirmed.
The Financial Times (FT) reported on the eighth (local time) that TSMC decided not to produce AI chips using cutting-edge processes of seven nanometers (nm) or less to Chinese customers from the eleventh.
In the long run, if a Chinese chip design company requests the production of such advanced AI semiconductors, it plans to undergo a previous approval process in the US.
Chinese big tech corporations similar to Alibaba, Baidu, and Tencent, which have made large investments in AI semiconductor design for data centers, are expected to take a big hit consequently. Currently, many technology corporations rely heavily on TSMC to fabricate high-performance AI chips.
President-elect Donald Trump, who returned to power, has previously expressed negative opinions about Chinese and Taiwanese semiconductor corporations. In an interview with Bloomberg last July, he said, “Taiwan monopolizes the semiconductor industry and provides nothing to the US. “They need to pay us,” he said, raising his voice.
As well as, President-elect Trump expressed a critical stance on the ‘CHIPS Act’, a semiconductor support law promoted by the Biden administration, and there are predictions that he may pursue a powerful tariff policy on foreign chip corporations.
Accordingly, it’s interpreted that TSMC, which decided to receive subsidies from the Biden administration, is responding quickly. TSMC plans to receive $6.6 billion (about 9 trillion won) in subsidies and $5 billion (about 7 trillion won) in low-interest loans to construct a semiconductor factory in Arizona, USA.
On this regard, Bloomberg reported on the sixth that TSMC accomplished support contract negotiations with the U.S. government, which is interpreted as a measure to secure legal binding force before President Joe Biden leaves office.
A TSMC official explained, “This decision is just not a show for President-elect Trump,” and “It’s a measure to emphasise that TSMC is a very good company that doesn’t go against the interests of the US.”
There are also predictions that restrictions on AI chip production for Chinese corporations is not going to have a big impact on TSMC’s sales. It’s because demand for high-performance AI chips exceeds supply.
TSMC’s sales in October were reported to have increased 29.2% in comparison with the identical period last 12 months, reaching roughly $9.8 billion (roughly KRW 14 trillion).
Meanwhile, Taiwan’s DigiTimes reported on the eighth that President-elect Trump, President Biden, and TSMC founder Maurice Chang will attend the opening ceremony of the TSMC factory Fab 21 to be held in Arizona, USA, in early December.
It was said that spotlight shall be paid to what position President-elect Trump will express regarding TSMC and the Chip Act through this event.
Reporter Park Chan cpark@aitimes.com
