Will China seize Tsmc’s chips?
A leading Chinese economist calls on authorities to seize Taiwanese microchip company Tsmc in case of harsh US sanctions. All the details and updates on Tsmc's plans in Europe
Chen Wenling, chief economist at the China Center for International Economic Exchanges, called on the Chinese authorities to seize Taiwanese semiconductor company TSMC in case the United States imposes sanctions on China similar to those applied to Russia after the invasion of China. 'Ukraine.
WHAT CHEN SAID
In his speech at a conference hosted by the Chongyang Institute for Financial Studies, a think tank of the Renmin University of Peking, Chen stated that "if the United States and the West impose on China destructive sanctions such as those against Russia, we must recover. Taiwan ". Taiwan is a country unto itself, with its own government and president, but it is not recognized as such by China, which considers it a province of its own territory to be brought under its control, even by force.
"We have to take over TSMC," added Chen, "for the reconstruction of the industrial chain and the supply chain." "They are accelerating the move to the United States to build six factories there," he said, referring to the company's plans to open factories in America; "We must not allow all the transfer goals to be achieved."
TSMC is the largest contract semiconductor manufacturer in the world: it alone is worth more than half of the market for manufacturing microchips (they are made in factories called foundries). One of TSMC's most famous customers is Apple, which needs its chips to make iPhones work.
THE RACE TO MICROCHIP
Microchips are components necessary for making cars, computers, appliances, smartphones and similar technological devices, among other things; they are therefore crucial for the future development and competitiveness of economies.
While TSMC is capable of producing advanced semiconductors, of very small dimensions, China is lagging behind and therefore depends on imports. The United States is the first in the world as regards the design phase of microchips, but they also want to count more as regards their manufacture, in order to be more autonomous from Asia and reduce supply risks.
TSMC FACTORIES IN AMERICA
Chen talks about six chip factories planned by TSMC in US territory; the number appears in several journalistic reconstructions, although the company has only announced one worth 12 billion dollars, despite having bought very large plots of land.
THE IMPORTANCE OF TSMC FOR CHINA
Chen Wenling's words are relevant because the research center he works at, the China Center for International Economic Exchanges, is overseen by the National Development and Reform Commission, China's leading economic planning body. Furthermore, the economist's statements reaffirm the strategic value assigned by Beijing to the Taiwanese chip industry, especially in light of the economic-political competition with Washington.
THE USA-CHINA TECHNOLOGICAL COMPETITION
The United States, already under the administration of former President Donald Trump, has imposed restrictions on the export of critical technologies to China, such as those for the manufacture of advanced semiconductors. Joe Biden's current administration is continuing in the same direction, to the point that the spokesman for the Chinese Foreign Ministry, Zhao Lijian, recently accused Washington of being excessively broadening the concept of national security and thus wanting to deprive Beijing "of his right to development ".
To decrease dependence on foreign countries and the level of vulnerability to US sanctions, Chinese President Xi Jinping has launched a program to achieve technological self-sufficiency. He also ordered Deputy Prime Minister Liu He to devise an initiative to help domestic microchip manufacturers overcome US restrictions.
NO EUROPE FOR TSMC
Today TSMC announced that it has no concrete plan for the opening of factories in the European Union: in recent weeks there was talk of the possibility that the company would build a foundry in Germany or Italy .
"In Europe we have relatively fewer customers", explained chairman Mark Liu during the shareholders' meeting, "but we are still evaluating and have no concrete plans yet."
As we wrote on Startmag , in Europe the demand for semiconductors comes mainly from car manufacturers, which unlike technology companies do not need very advanced chips, that is, those that guarantee the greatest profits to manufacturers. Companies such as TSMC or Intel, therefore, have some doubts about the absorption capacity of the European market: to re-enter the large investments necessary for the construction of factories (in the order of tens of billions of dollars), they must be sure that these will then work at full capacity, generating sufficient income to cover expenses.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/cina-tsmc-taiwan/ on Thu, 09 Jun 2022 05:06:52 +0000.