The US is making broad plans to tackle a seemingly relentless chip crunch and boost supply chain transparency, going so far as to ask semiconductor firms to hand over information about their industry. With Taiwan Semiconductor Manufacturing Co (TSMC) playing a vital role in supplying chips to US heavyweights from Apple to Ford, the government must remain alert to the effects these efforts could have on the nation’s “sacred mountain.”
While there is no need to panic, the government needs to keep a clear head and prepare for new developments to help TSMC and other semiconductor firms stave off the worst effects of the chip crisis, as the US and Europe race to build up their own silicon supply chains.
Late last month, the US Department of Commerce asked firms in the semiconductor supply chain to provide within 45 days information about inventories, demand and delivery dynamics, to help the US understand shortages and identify possible hoarding. US Secretary of Commerce Gina Raimondo said the request was voluntary, but added that she might invoke the Cold War-era Defense Production Act or other tools to force companies to give up that information.
The announcement made waves in Taiwan after a BusinessKorea report said the disclosure of customer information to the US would have serious effects on the industry. The report also said that chip prices might be “significantly affected by disclosure of inventory and production data.” South Korea’s Samsung Electronics and SK Hynix are among the semiconductor firms the US asked to share that information.
Some legislators demanded a government response over concern that TSMC could risk losing its market lead to US rivals once crucial customer and corporate data were revealed. Some Chinese Nationalist Party (KMT) legislators even asked the government to lodge a complaint with the US, saying that it should not leave TSMC in the lurch. The worries are understandable as TSMC is a cornerstone of Taiwan’s economy. With revenue of NT$1.06 trillion (US$38.04 billion) and NT$750 billion of added value created in 2019, TSMC contributed at least 4 percent to Taiwan’s GDP. Any missteps would be costly.
Minister of Economic Affairs Wang Mei-hua (王美花) said the ministry was in close contact with local semiconductor companies and was monitoring the situation, adding that the US was not singling out TSMC. The ministry would promptly provide support as needed, she said.
TSMC said it would not give the US any confidential information about its customers. The chipmaker also said it did not hoard inventory, as it makes chips and builds capacity based on customer demand. The chipmaker also said it would seek government help if needed.
To mitigate the effects of an acute chip shortage, TSMC said it would boost output of microcontroller units, a key component used in vehicles, by 60 percent this year over last year’s level after a meeting with the White House.
It is premature to gauge how the US’ latest efforts to fix the chip crunch would adversely affect local companies. As the world’s top foundry service provider, TSMC should be cautious about its every move, as the global geopolitical crisis is weighing on semiconductor supply chains. With leadership in advanced technologies and strong customer portfolios, TSMC has gained a competitive edge over its rivals.
When it comes to the political front, it is the government’s responsibility to help TSMC and local chip firms handle, or avert, potential political influence, as the impact would be great. The nation’s entire chip industry and economy would be affected.
As the Chinese Communist Party (CCP) and its People’s Liberation Army (PLA) reach the point of confidence that they can start and win a war to destroy the democratic culture on Taiwan, any future decision to do so may likely be directly affected by the CCP’s ability to promote wars on the Korean Peninsula, in Europe, or, as most recently, on the Indian subcontinent. It stands to reason that the Trump Administration’s success early on May 10 to convince India and Pakistan to deescalate their four-day conventional military conflict, assessed to be close to a nuclear weapons exchange, also served to
After India’s punitive precision strikes targeting what New Delhi called nine terrorist sites inside Pakistan, reactions poured in from governments around the world. The Ministry of Foreign Affairs (MOFA) issued a statement on May 10, opposing terrorism and expressing concern about the growing tensions between India and Pakistan. The statement noticeably expressed support for the Indian government’s right to maintain its national security and act against terrorists. The ministry said that it “works closely with democratic partners worldwide in staunch opposition to international terrorism” and expressed “firm support for all legitimate and necessary actions taken by the government of India
The recent aerial clash between Pakistan and India offers a glimpse of how China is narrowing the gap in military airpower with the US. It is a warning not just for Washington, but for Taipei, too. Claims from both sides remain contested, but a broader picture is emerging among experts who track China’s air force and fighter jet development: Beijing’s defense systems are growing increasingly credible. Pakistan said its deployment of Chinese-manufactured J-10C fighters downed multiple Indian aircraft, although New Delhi denies this. There are caveats: Even if Islamabad’s claims are accurate, Beijing’s equipment does not offer a direct comparison
To recalibrate its Cold War alliances, the US adopted its “one China policy,” a diplomatic compromise meant to engage with China and end the Vietnam War, but which left Taiwan in a state of permanent limbo. Half a century later, the costs of that policy are mounting. Taiwan remains a democratic, technologically advanced nation of 23 million people, yet it is denied membership in international organizations and stripped of diplomatic recognition. Meanwhile, the PRC has weaponized the “one China” narrative to claim sovereignty over Taiwan, label the Taiwan Strait as its “internal waters” and threaten international shipping routes that carry more