Photographer: Billy HC Kwok / Bloomberg
Photographer: Billy HC Kwok / Bloomberg
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Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, warned for the first time that trade tensions could disrupt access to key production equipment and affect its operations amid rising friction between the US and China.
The company, which produces semiconductors for Apple Inc. and other major global technology companies, he said in his annual report published on Friday that “ongoing trade tensions or protectionist measures could lead to rising prices or even the unavailability of key equipment.” He noted factors such as delays or denials of export licenses, additional export control measures and other tariff or non-tariff barriers.
TSMC relies on equipment from U.S. suppliers, including Applied Materials Inc. and Lam Research Corp., for production. The company said trade tensions could also prevent the raw materials needed for production from being secured, repeating a point it mentioned in the previous annual report.
Semiconductors have become a key area of growing competition between the United States and China with chips used in a wide range of products, from missiles and cars to smartphones. China is looking forward to it encourage a domestic semiconductor industry to reduce its dependence on foreign technology as the United States tightens control over 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 Sen. Tom Cotton urged the state and trade departments to find a better way to “mitigate the risk of Taiwanese companies providing services and technologies to troubled entities,” adding that TSMC should not manufacture 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 U.S. blacklisted companies, is concerned with building supercomputers used by Chinese military actors, their 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 adopted a blockade statute that “entitles Chinese entities to incur damages for compliance with foreign legislation of a multinational to seek civilian remedies,” he said.
“Measures taken by an affected country to counteract the impacts of another country’s actions or regulations could lead to significant legal liability for multinational companies, including ours,” TSMC said in the report.
Read more: China responds to U.S. sanctions with new rules