As Taiwan plays a key role in global supply chains, local semiconductor companies should be cautious in responding to US plans to further curb exports of advanced chips to China, Powerchip Semiconductor Manufacturing Corp (力積電) chairman Frank Huang (黃崇仁) said yesterday.
Huang’s comments came in the wake of media reports that US President Joe Biden’s administration is considering broadening its ban on US exports of artificial intelligence chips and semiconductor equipment to China, aiming to obstruct Beijing’s progress in enhancing its chip development and manufacturing capabilities.
“The whole world needs chip supply from Taiwan. The supply chain cannot be disrupted abruptly,” Huang said. “Besides, Taiwan maintains a complementary relationship with China.”
Photo: CNA
Taiwanese manufacturers such as Quanta Computer Inc (廣達電腦) and Wistron Corp (緯創) assemble computers in China, but the chips they use are from Taiwan, he said.
Likewise, Apple Inc purchases Taiwan-made chips to manufacture iPhones in China, he added.
The US restrictions would have a mixed impact on Taiwanese companies, Huang said.
Taiwanese firms would obey US rules and its curbs on shipping advanced chips and sensitive technologies to China, but they would need a grace period of a year to seek alternative solutions, he said.
Under such a complex geopolitical environment, Taiwanese companies should carefully evaluate the pros and cons before making a decision and find solutions to prevent supply chain disruptions, he said.
Commenting on the latest inventory-driven semiconductor slowdown, Huang said investors have “overly reacted” to the ups and downs of the industry.
Semiconductor demand has come down from a peak driven by strong demand for PCs to cope with new work and lifestyles due to the COVID-19 pandemic in the past two to three years, he said.
Powerchip shares have tumbled amid a spate of corporate warnings about slowing demand for chips. The stock yesterday ended down 1.25 percent at NT$31.60 in Taipei trading.
The company, which makes power management ICs, dismissed the rumors, saying that most customers were adjusting their inventories.
Powerchip’s revenue surged about 40 percent to NT$55.71 billion (US$1.79 billion) in the first eight months of the year, compared with NT$39.82 billion in the same period last year.
The semiconductor industry would experience a mild recovery after supply chain inventory drops to a reasonable level through December and a brief dip caused by surging inflation, Huang said, adding that he was confident about the local semiconductor industry’s long-term prospects.
The production value of the local semiconductor industry surpassed NT$4 trillion for the first time last year, rising 26.7 percent from a year earlier to NT$4.1 trillion, Vice Premier Shen Jong-chin (沈榮津) said yesterday at the opening ceremony of the Semicon Taiwan trade show at the Taipei Nangang Exhibition Center’s Hall 1.
Taiwan has played a critical role in the global semiconductor industry on the back of a well-built industry cluster and its lead in advanced processes, Shen said.
The Investment Commission yesterday approved a Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) application to invest an additional US$3.5 billion in its Arizona subsidiary to manufactured advanced chips. The world’s largest contract chipmaker’s board of directors last month approved the funding project after TSMC started moving manufacturing equipment into the fab in December last year in preparation for the production of 4-nanometer chips next year. TSMC said it has also commenced the second phase of facility construction in Arizona. The second fab is to produce semiconductors using 3-nanometer technology in 2026. Altogether, TSMC plans to spend US$40 billion on the Arizona fabs, doubling its
KEY SECTOR: Taiwan’s new chip legislation is insufficient, and a more strategic ‘chip act’ that covers the whole semiconductor ecosystem is needed, MediaTek’s chairman said MediaTek Inc (聯發科) chairman Rick Tsai (蔡明介) yesterday urged the government to formulate a state semiconductor strategy and comprehensive “chip act” that includes local chip designers and smaller-scale semiconductor companies, as they are facing intensifying competition from China. The government is playing an increasingly important role in safeguarding the local semiconductor industry’s competitiveness, given that the US, the EU and Japan are offering hefty subsidies and significant tax incentives to build semiconductor capacity domestically, as they have realized the strategic importance of semiconductors, Tsai said. To implement such a program, the government should take steps to finance a “chip act,” Tsai said
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
MOUNTING PRESSURE: Although bank failures in the US and Europe would not cause systemic risks, it would dampen consumers’ willingness to spend, GlobalWafers said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said that the financial turmoil in the US and Europe has dimmed the outlook for chip demand in the second half of this year, as growing economic uncertainty could dampen consumer spending. The Hsinchu-based wafer manufacturer said it is seeing greater pressure from economic uncertainty on the industry’s recovery, as customers would have not expected Silicon Valley Bank, Signature Bank and a tier-one bank like Credit Suisse Group SA to collapse suddenly. Although the failures are unlikely to cause systemic risks, consumers would be cautious of spending on non-essential items, such