Send sheep into the tiger’s mouth?The United States is rumored to require TSMC to hand over operational data

According to South Korean media reports, in order to solve the chip shortage, the U.S. government resorted to extreme measures to force wafer foundries to hand over data such as chip inventory, orders, and sales records that were considered “corporate secrets.” That would weaken the bargaining power of TSMC and Samsung Electronics, and could hit prices in the overall chip market, the people said.

The Korea Economic Daily and the Korea Herald reported that U.S. Commerce Secretary Gina Raimondo said at the Global semiconductor Summit held at the White House on September 23 that the U.S. government needs more information on the chip supply chain to improve transparency, Find out where the bottleneck is. When asked what would the US do if fabs were reluctant to submit data? “We have other magic weapons in our toolbox that allow practitioners to hand over data, and I hope we don’t go this far, but if necessary, we will,” Raimondo said. It is understood that the US is considering citing the Defense Production Act to force the industry to submit.

At present, the White House has given global chipmakers 45 days to voluntarily hand over data, but according to relevant information from Bloomberg, most companies are reluctant to respond to this request. Because if the industry discloses production data such as yield, it will put the foundry at a disadvantage when negotiating with customers. Some industry executives revealed that publicizing the yield rate and customer list is equivalent to revealing the technical level of each factory, and the foundry will be in a disadvantageous position when negotiating with buyers. Therefore, large foundries such as TSMC and Samsung Electronics have never announced the list of customers. The U.S. requires manufacturers to turn over these corporate secrets this time, which may “force them into a tight corner”. Industry executives said that publicizing the yield rate is equivalent to revealing the technical level of each factory, and the foundry will be in a disadvantageous position when negotiating with buyers.

Meanwhile, other experts pointed out that the data requested by the U.S. government could also hit prices in the overall chip market, with customers asking to haggle in the event that fab inventory levels are high. Not only that, but fabs outside the U.S. are also worried that U.S. requests will benefit U.S. companies. An industry source said: “It is not impossible for the data reported by Samsung and TSMC to the U.S. government to leak to U.S. companies.”

The U.S. Department of Commerce pressures TSMC to have a criminal record

On May 4 this year, U.S. Commerce Secretary Gina Raimondo said that the U.S. Department of Commerce is pressuring Taiwanese chipmaker TSMC and other Taiwanese companies to prioritize meeting the needs of U.S. automakers in the short term , to alleviate chip shortages.

Raimondo said at an event for the Council of the Americas that increased long-term investment is needed to produce more semiconductors in the U.S., adding that other key supply chains also need to be re-integrated, including to allies transfer.

“So many American jobs are at stake, and we’re trying to see if we can get the Taiwanese and the big business over there, TSMC, to prioritize us,” Raimondo said in response to a question from a General Motors executive. The needs of the car companies.” The mid- to long-term solution, she said, would be to “make more chips in the U.S.” “As I said, there’s not a day where we don’t work hard on this.”

TSMC also said addressing the shortage remains its top priority, saying in a statement to Reuters on Wednesday: “TSMC has been working with all parties to alleviate the shortage of automotive chips, which we know is a global A common concern for the automotive industry.”

TSMC President Wei Zhejia said in a conference call that TSMC has been working with customers since January to reallocate more capacity to support the auto industry, but the shortage was exacerbated by the Texas snowstorm and manufacturing disruptions at factories in Japan. He estimates that chip shortages for its automotive customers will ease significantly from the next quarter.

The Commerce Department is planning to hold a high-level meeting with automakers next week on the chip shortage, officials with knowledge of the situation said. However, a Commerce Department spokesman declined to comment.

Josh Nassar, legal director of the United Auto Workers, said in written testimony to a U.S. House of Representatives hearing on Wednesday that the chip shortage has already resulted in the layoff of tens of thousands of workers. Production of automotive semiconductors.”

Ford Motor warned last week that a chip shortage could cut production in half in the second quarter, costing it about $2.5 billion and about 1.1 million vehicles in 2021. General Motors said on Friday it would extend the shutdown of several North American plants due to a shortage of chips.

On April 12, Biden convened the top executives of the semiconductor and auto industries to discuss solutions to the chip crisis. He supports a $50 billion investment in chip manufacturing and research in the United States.

Reuters quoted three sources as saying that TSMC plans to build five more chip manufacturing plants in Arizona, in addition to the one originally planned.

In May 2020, TSMC announced that it would invest $12 billion to build a chip factory in Arizona. The factory is a 12-inch chip factory in Phoenix and is expected to be mass-produced in 2024.

Most of TSMC’s chips are produced in Taiwan, and the company has older chip plants in Nanjing, Shanghai, China, and Washington state.

TSMC initially announced plans to use the company’s most advanced 5-nanometer semiconductor manufacturing technology at its chip factory in Arizona, but it is small, producing only 20,000 wafers per month, each containing Thousands of chips. Reuters pointed out that it is still unclear how much investment and capacity the new chip factory may cover, and which chip manufacturing technology will be used.

TSMC said last month that it plans to invest $100 billion over the next three years to increase production capacity, but the company gave no details.

A person with direct knowledge of the matter told Reuters that the expansion was in response to a U.S. request, but he declined to provide further details. “The U.S. has requested this. TSMC is planning to build as many as six chip plants internally.”

Another source told Reuters that the company had secured enough room to expand when it secured land for its first chip factory, “so that they can build six factories.”

A third TSMC supplier involved in the Arizona project said TSMC had told them it planned to build a total of six fabs over the next three years. However, Reuters could not independently confirm the timetable.

The Biden administration is preparing to spend tens of billions of dollars to support domestic chip manufacturing. Foreign companies are also eligible to receive the funds under existing law, but whether they will ultimately receive them remains unknown.

Wei Zhejia, president of TSMC, said on the previous earnings call: “But in fact, we have acquired a large piece of land in Arizona to provide flexibility. Therefore, further expansion is possible, but we will gradually expand the first phase first, Then we decide what to do next based on operational efficiency and costs and the needs of our customers.”

But when TSMC was asked if the planned expansion was due to U.S. demands, TSMC said it was “not sure” what the “request” from the U.S. meant, “as soon as there is any formal decision, we will disclose accordingly.”

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