The US government still wants TSMC to produce chips in America

[midian182]

Why it matters: The Taiwan Semiconductor Manufacturing Company (TSMC) is well-known for producing chips used by tech giants such as Apple and Qualcomm, but it also creates them for the US military. As such, the American government is pressuring the firm to make these components in the United States to ensure there is no interference from China.

As reported by the Nikkei Asian Review, TSMC makes chips that are used in American F-35 fighter jets. The tension between China and the US is still high despite the countries signing “phase one” of a broader trade agreement this week, prompting Washington to pressure TSMC into producing in the US.

This isn’t the first time the US has made such a request. It did the same thing in November, asking TSMC to make semiconductors in America to avoid security issues, but the company is exercising caution, given the high costs of such a move.

A Lockheed Martin F-35 Lightning II that contains TSMC-produced chips

“We have never ruled out building or acquiring a fab [semiconductor fabrication plant] in the United States, but currently there is no concrete plan," TSMC told Nikkei.

Last year, Chinese President Xi Jinping said Beijing would not rule out using force to unite China and Taiwan. With the possibility of China taking control of the island, the US doesn’t want its chips within reach of its military and tech rival.

"We've noticed that many U.S. tech executives and government officials are concerned about their country's dependence on TSMC and the security of their defense industry's supply chains," said Su Tze-yun, director of Taiwan's Institute for National Defense and Security Research.

TSMC might not have given the US government a straight “no,” but it’ll likely take a lot more pushing before the company accepts the request to move some production abroad.

Permalink to story.

https://www.techspot.com/news/83579-us-government-wants-tsmc-produce-chips-america.html

 

[Squid Surprise]

Lol... I suspect that unless the US offers to PAY for them to move (good luck with that), they aren’t going anywhere.

 

[Irata]

The reasoning is understandable, but there would have to be considerable economic incentives.

Maybe if Global foundries were to sell off a fab?

 

[umbala]

Yes, yes, the US government wants a LOT of things. Every country and every company should do everything to benefit the US. When a country or company makes a decision about anything they should always ask themselves "does this benefit America?" and base their decision on the answer. You know because the US is the ONLY country that matters!! <end sarcasm>

 

[umbala]

The reasoning is understandable, but there would have to be considerable economic incentives.

Maybe if Global foundries were to sell off a fab?

You keep living that fantasy. Americans want dirt cheap products, but they also want it all manufactured domestically with workers being paid top dollar. There's no amount of economic incentives that will make that equation work.

 

[Irata]

You keep living that fantasy. Americans want dirt cheap products, but they also want it all manufactured domestically with workers being paid top dollar. There's no amount of economic incentives that will make that equation work.

I think the reason here is mostly security as it would be very easy for China to disable TSMC's fabs.

It needn't even be that - natural disasters come to mind. Having basically all leading edge fabs in relatively close proximity is dangerous.

 

[Squid Surprise]

I'm not sure they actually want the chips manufactured on US soil.... but the politicians definitely want it to look like they do - votes matter

If they really wanted it to happen, they could make it happen - the US has enormous political and economic clout when they bother to use it....

 

[Uncle Al]

"It did the same thing in November, asking TSMC to make semiconductors in America to avoid security issues, but the company is exercising caution, given the high costs of such a move."

It is common knowledge in the military that such requests result in much higher costs that the Government is more than willing to pay so there should be no problem .... unless, of course, TSMC is planning to distribute their work more widely than the US which is highly probable.

 

[BadThad]

Poor Taiwan! The Chinese bullies keep meddling and meddling in their affairs.

 

[Lew Zealand]

Lol... I suspect that unless the US offers to PAY for them to move (good luck with that), they aren’t going anywhere.

No no no, clearly Mexico is gonna pay for that.

 

[Rayneofpayne]

From Taiwanese prospective this is non ideal, as if China invades, because they make these chips in Taiwan, it will force the US and several other countries to intervene. The US on this one can't have it's cake and eat it too. Protect Taiwan and protect your suppliers.

 

[quadibloc]

While there are legitimate reasons for defense-critical chips to be made in the United States, such as making it more difficult for spies from China or North Korea to either learn about them or interfere with their production, yes, fear that China might annex Taiwan should not be part of the equation. That won't happen unless the United States lets it happen.

 

[milliganp]

An Aircraft Carrier costs $40Bn, a nuclear power plant $30Bn and the F35 program cost is $1.5Tn. Given the strategic importance of semiconductors, a government funded or mandated program ought to be a no brainier. Trump put tarifs on Canadian Aluminum and Steel on national security grounds, why not semiconductors?

 

[Danny101]

This has to always be a concern. TSMC are making chips for U.S. weapons that could be aimed at China. So TSMC definitely has to be a high value target in China's eyes. TSMC does make chips for many nations and companies. China might want to rethink too much interference in TSMC, that may piss off many nations.

 

[Irata]

While there are legitimate reasons for defense-critical chips to be made in the United States, such as making it more difficult for spies from China or North Korea to either learn about them or interfere with their production, yes, fear that China might annex Taiwan should not be part of the equation. That won't happen unless the United States lets it happen.

The thing is China does not even need to annex / invade Taiwan - a few well placed missiles will knock out the fabs and I doubt they can be quickly repaired and made operational again. What would the US' reply be in that case ? Particularly if the US were involved in a larger conflict with another country at that time.

Not saying the Chinese would do this, but having the option does pose a risk

A really strong earthquake may have the same effect or at least take out part of fabs.

But, like other posters pointed out in this thread - TANSTAAFL.

 

[Charles Olson]

If only Intel chips were more secure then NASA could use those ! Right now online etailers in other countries ( Mind Factory and Japanese sites ) are reporting that they sell 82% AMD chips to 18% Intel so Intel must be hurting and should be able to make all the chips that NASA needs ! Some or all Intel chips might be made in the USA !

 

[gamoniac]

The thing is China does not even need to annex / invade Taiwan - a few well placed missiles will knock out the fabs and I doubt they can be quickly repaired and made operational again. What would the US' reply be in that case ? Particularly if the US were involved in a larger conflict with another country at that time.

Not saying the Chinese would do this, but having the option does pose a risk

A really strong earthquake may have the same effect or at least take out part of fabs.

But, like other posters pointed out in this thread - TANSTAAFL.

Using the term annex is probably not right considering no country in the world, including the US, has officially acknowledged Taiwan as a sovereign nation. The whole China-Taiwan geopolitical situation there is complicated, but the reliance on TSMC definitely does not make things simpler. Let's hope that problems there can be solved peacefully.