TSMC's Sudden Shift: A Global Chip Giant's Difficult Choices in the US-China Game

Tech 2024-11-19 12:27:48 Source: Network

TSMC's Sudden Shift: A Global Chip Giant's Difficult Choices in the US-China GameThe unexpected defeat of Donald Trump in the 2020 US presidential election sent shockwaves through the global semiconductor industry. However, even more surprising was TSMC's swift response to the US government in the aftermath

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The unexpected defeat of Donald Trump in the 2020 US presidential election sent shockwaves through the global semiconductor industry. However, even more surprising was TSMC's swift response to the US government in the aftermath. While many in the industry anticipated a softening of the Trump administration's hardline stance on China after the election, TSMC's actions revealed a keen understanding of the shifting American political winds and a difficult choice in the US-China technological rivalry.

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This article delves into TSMC's strategic adjustments in the lead-up to and following the 2020 US election, examining the pressures exerted by the US government and the impact of these adjustments on the global semiconductor landscape, particularly the US-China tech competition.

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Trump Administration's Pressure and TSMC's Rapid Response

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The outcome of the 2020 US presidential election surprised many, with Joe Biden emerging victorious. Yet, just three days after the election results were finalized on November 5th, on November 8th, the Trump administration issued urgent requests to 14 US companies, including global semiconductor giant TSMC. This preemptive move signaled the immense pressure being exerted on TSMC, even during the transition of power.

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TSMC, a leader in the global semiconductor industry commanding approximately 40% of the market share and possessing an unparalleled advantage in advanced process node chip manufacturing, became a key focus for the US government. The Trump administration had consistently imposed stringent technological sanctions on China, aiming to curtail China's rise in high-tech sectors. TSMC, a Taiwan-based company with significant business dealings in mainland China, found itself at the epicenter of the US-China tech rivalry.

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The Trump administration's demands were not unfounded. On November 9th, the administration sent a letter to TSMC, criticizing the perceived ambiguity of the Biden administration's China trade policy, claiming it left the US in a reactive position, and urging TSMC to take swift action. This letter served as a significant pressure tactic, demanding a rapid response aligned with US strategic objectives.

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Faced with the Trump administration's relentless pressure, TSMC, after receiving a second urging on November 11th, made its decision within a mere 30 minutes. This astonishing speed underscores the immense pressure exerted by the US government. TSMC subsequently announced it would cease supplying 7nm and more advanced AI chips to mainland China customers, stating that future orders would require US government approval.

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The Shockwaves of TSMC's Announcement

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TSMC's announcement sent shockwaves through the global semiconductor industry. Previously, TSMC had repeatedly stated it would not bow to US government pressure and would continue serving mainland China customers. This 180-degree turn was breathtaking. Further fueling concern was the subsequent revelation of a statement from other chip manufacturers, indicating that multiple companies agreed to halt new orders for 7nm and more advanced product lines from mainland China.

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This statement not only highlighted the US government's immense influence over the global semiconductor industry but also suggested an attempt by the US government to build an anti-China global semiconductor ecosystem through alliances.

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Deepening Impacts on US-China Tech Competition

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TSMC's move is a direct reflection of the intensifying US-China tech competition. Mainland China has long striven to develop its independent semiconductor industry and break the US's dominance in the field. However, facing US sanctions and pressure, China's semiconductor industry development faces significant challenges.

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As the world's leading chip foundry, TSMC's actions directly impact the development of mainland China's semiconductor industry. TSMC's halt in supply will undoubtedly exacerbate the difficulties faced by China's chip industry and compel it to seek alternative solutions and increase investment in independent R&D.

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The US government's actions are not solely aimed at containing China; they are also deeply intertwined with its own interests. The US seeks to maintain its hegemony in the global semiconductor industry and prevent China from surpassing it. By pressuring TSMC, the US government aims to solidify its control over the global semiconductor supply chain.

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TSMC's Dilemma and Choice

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TSMC's decision was not easy. Internal dissent existed, with some advocating for continued cooperation with mainland China, believing it to be in TSMC's best interest and conducive to maintaining stability in Taiwan. However, faced with immense US government pressure and significant incentives, TSMC ultimately chose to compromise.

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TSMC's choice also reflects the predicament of Taiwanese businesses in the US-China game. These businesses simultaneously desire to maintain good relations with mainland China while facing pressure from the US government. This precarious position forces difficult choices.

Future Outlook: US-China Tech Competition and the Global Industry Landscape

The TSMC event provides a window into the US-China tech competition and the evolving global industry landscape. Future developments will depend on the competitive dynamics between the US and China, and the positions and choices of other nations in this rivalry.

If the US continues its technological sanctions against mainland China, the global semiconductor industry landscape will undergo a significant reshaping. Mainland China will likely further increase R&D investment, seek technological breakthroughs, and strive to create a self-reliant semiconductor supply chain. Other countries will also face pressure to choose sides.

If the US eventually eases its technological sanctions on mainland China, the global semiconductor industry may move towards a new equilibrium. However, the long-term sustainability of such an equilibrium remains uncertain.

In conclusion, TSMC's sudden shift is a microcosm of the intensifying US-China tech competition and reflects the complex challenges facing the global semiconductor industry. The future trajectory of the global semiconductor industry will depend on the interplay of numerous factors, and TSMC's fate will continue to be influenced by the US-China rivalry. The global landscape faces a reshuffling between respect and power. Geopolitical factors and economic interests will continue to drive competition, with the ultimate outcome yet unknown.

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