The 5nm and 3nm chips by TSMC are maxed out. What happens next?

The 5nm and 3nm chips by TSMC are maxed out. What happens next? (Photo by Sam Yeh / AFP)

China boiling mad over Taiwan’s TSMC handing over chip data to the US

Taiwan’s TSMC has come under fire by China for its decision to comply with a US request for information. This anger, which has manifested itself on Chinese social media stems from fears that the US could use the information to sanction Beijing. 

This is, however, despite the Taiwan chipmaker saying that it would not “reveal confidential client information to the US government”. 

Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Co) is arguably the most important player in the global semiconductor industry. 

It also said in a statement last week that it will “respond to” a request by the US Commerce Department that sought information from chip companies in the semiconductor supply chain. Other chipmakers include South Korea’s Samsung Electronics and the United State’s Intel. 

As reported by SCMP, the specifics of the information that TSMC will provide to the US is still unknown. However, the company said it won’t disclose “confidential information” from clients and “will not harm the rights of our customers and shareholders.”

According to the US government, their request was aimed at getting to the root of the global chip shortage. With that said, no Chinese company was directly involved.

Despite these assurances, however, the Chinese were not placated. 

According to SCMP, who spoke to Xi Chen, an academic committee member at Peking University’s Institute for Global Cooperation and Understanding, the data could “potentially help Washington impose sanctions on Chinese companies in a more precise way”.

The semiconductor market in China is by far the largest, accounting for about 35% of the global market share, surpassing the US, Europe, Japan, and even Taiwan, which is home to the largest manufacturer of semiconductor chips.

Criticisms of Taiwan’s TSMC appeared on multiple digital media platforms, such as Weibo, WeChat, and various websites.

“We believe that TSMC, Samsung, and other semiconductor companies may provide relatively insensitive information in response to the US government,” said Eric Tseng, chief executive of Taiwan-based research firm Isaiah Research.

“But key information related to customers’ trade secrets and rights, such as customer lists, order contents, and amounts, will be kept confidential to maintain the long-standing trust between TSMC and its customers,” he added.

The US Commerce Department requested that domestic and overseas players in the semiconductor value chain “voluntarily” provide information about their sales, inventory, and client details to quantify semiconductor supply chain risks.

As the world’s most advanced wafer foundry, TSMC plays a critical role in China’s quest to be chip self-sufficient. Previously, the Taiwanese foundry had complied with US sanctions on Huawei Technologies Co, which had crushed the once-behemoth of a smartphone maker.

Additionally, TSMC had also ceased the production of chips for Phytium Information Technology Co, one of the seven Chinese supercomputer-related organizations added to the US Entity List in April, dealing a blow to China’s pursuit of supercomputing.

In September this year, top chip manufacturers in China have been speeding up efforts to boost production, with the country’s top contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), is planning to build a new fabrication facility that will become China’s largest such facility used for products other than memory.