Taiwanese chipmakers have been investing in mainland China since the 1980s, and today thousands of companies operate there. Breaking away from China won’t be easy, but it seems the process has begun
Taiwanese chipmakers have been investing in mainland China since the 1980s, and today thousands of companies operate there. Breaking away from China won’t be easy, but it seems the process has begun
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The US is suppressing China’s progress in manufacturing technology using American intellectual property. In October, the US Commerce Department passed new semiconductor export restrictions on dozens of Chinese companies and research institutions.
The move comes just days after the Pentagon expanded its blacklist. Companies around the world were also barred from exporting to China AI and supercomputing chips that are made using US software or hardware.
If these trade barriers weren’t enough, China shot itself in the foot with a COVID-related lockdown, which has significantly disrupted the global supply chain for electronic components and consumer electronics.
In April, truck drivers transporting products from factory to factory or factory to port across city borders were ordered to take daily COVID-19 tests. People at risk of infection have been asked to quarantine themselves. Such policies have delayed customs clearance at ports.
The country’s “zero COVID-19” policy is hurting supply chains, and those most affected are those in the semiconductor business. Taiwanese chip firms have been caught between the two countries as both China and the US favor companies that count major technology firms such as Apple, Nvidia and Qualcomm as their customers.
Despite massive investments in the US by Taiwan Semiconductor Manufacturing Company (TSMC) and Apple supplier Foxconn Technology, some analysts say Taiwanese manufacturers stay away from the US due to their relatively high business costs.
“The US-China trade conflict and escalation of cross-strait tensions pose more serious challenges for all industries, including the semiconductor industry,” TSMC President Mark Liu said at an industry group event on Wednesday. Reuters,
According to Trendforce data, TSMC alone accounted for 54% of total foundry revenues globally last year. In the advanced semiconductor category, Taiwan accounts for 92% of production, according to a report by Boston Consulting Group.
Some of the top semiconductor firms are now eyeing India, Vietnam and in some cases Japan for alternative foundry sites. in September, Foxconn and Vedanta signed a Memorandum of Understanding (MoU) A state government in India to invest ₹1,54,000 crore to set up a plant in Gujarat. TSMC is reported to weigh possible expansion into Japan to counter tensions between China and the US
Taiwanese chipmakers have been investing in mainland China since the 1980s, and today thousands of companies operate there. Breaking away from China will not be an easy matter, but the process has begun with top semiconductor firms looking forward to new horizons to keep global supply chains running smoothly and efficiently.