Photographer: Billy HC Kwok / Bloomberg
Photographer: Billy HC Kwok / Bloomberg
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Taiwan Semiconductor Manufacturing Co., the world’s largest chip maker, first warned that trade tensions could disrupt access to key manufacturing equipment and impact their operations amid mounting friction between the US and China.
The company, which produces semiconductors for Apple Inc. and other major global technology companies, said in its annual report released on Friday that “ongoing trade tensions or protectionist measures could lead to higher prices for, or even unavailability of, important equipment.” It pointed to factors such as delays or denial 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. for its production. and Lam Research Corp. The company said trade tensions could also prevent it from finding raw materials needed for manufacturing, reiterating a point it made in its previous annual report.
Semiconductors have become a major part of the increasing competition between the US and China with chips used in a wide variety of products, from missiles and automobiles to smartphones. China is eager Encourage a domestic semiconductor industry to reduce its reliance on foreign technology as the US tightens controls on chip-related exports to the Asian country, including key equipment sales to Chinese chip maker Semiconductor Manufacturing International Corp.
Earlier this week, two U.S. Republican lawmakers – Texas Congressman Michael McCaul and Arkansas Senator Tom Cotton – urged State and Trade Ministries to find a better way to “reduce the risk of Taiwanese companies providing services and technologies to entities of concern,” adding that TSMC should not be making advanced chips for the Chinese military .
The South China Morning Post reported this week that TSMC suspended new orders from Tianjin Phytium Information Technology Co., one of the companies blacklisted by the US, over concerns that it is involved in building supercomputers used by Chinese military actors, its military modernization efforts, or weapons of mass destruction.
The Taiwanese chip maker warned that new measures taken by China to counter US sanctions could affect its operations. In January, China passed a blocking statute that “gave Chinese entities harmed by a multinational corporation’s compliance with foreign laws the right to seek civil remedies,” it said.
“Measures taken by an affected country to counteract the consequences of the actions or regulations of another country could result in significant legal liability for multinational corporations, including ours,” TSMC said in the report.
Read more: China pushes back against US sanctions with new rules