Photographer: Billy HC Kwok / Bloomberg
Photographer: Billy HC Kwok / Bloomberg
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Taiwan Semiconductor Manufacturing Co., the world’s largest contract disk maker, has warned for the first time that trade tensions could disrupt its access to key production equipment and hit its operations, amid growing friction between the US and China.
The company, which manufactures semiconductors for Apple Inc. and other major global technology companies, said in its annual report Announced Friday that “ongoing trade tensions or protectionist measures could lead to increased prices for, or even non-availability of, important equipment.” It points to factors such as delays or refusal of export licenses, additional export controls and other tariff or non-tariff barriers.
TSMC relies on equipment from US suppliers, including Applied Materials Inc. and Lam Research Corp., for production. The company said trade tensions could also prevent it from securing raw materials needed for production, reiterating a point it made in the previous annual report.
Semiconductors have become a major area of increasing competition between America and China with chips used in a wide range of products, from missiles and cars to smartphones. China is eager to promote a domestic semiconductor industry to reduce their dependence on foreign technology, as the US tightens control over the export of chips to the Asian country, including key equipment sales to Chinese disc maker Semiconductor Manufacturing International Corp.
Earlier this week, two U.S. Republican lawmakers – Michael McCaul, a Texas congressman, and Tom Cotton, a senator in Arkansas – called on trade and commerce departments to find a better way to ‘reduce the risk of Taiwanese companies providing services and technologies to concerned entities’, adding that TSMC should not make advanced chips for China’s military.
The South China Morning Post reported this week that TSMC new orders suspended from Tianjin Phytium Information Technology Co., one of the blacklisted companies by the US, is concerned about the construction of supercomputers used by China’s military actors, the military modernization efforts or weapons of mass destruction.
The Taiwanese chipmaker has warned that new measures China has adopted to counter US sanctions could affect its operations. In January, China passed a blocking law that “entitles Chinese institutions to harm as a result of multinational compliance with foreign laws to obtain civil remedies,” he said.
“Measures taken by an affected country to counteract the consequences of actions or regulations of another country may result in significant legal liability to multinational corporations, including our own,” TSMC said in the report.
Read more: China pushes back against US sanctions with new rules