Piercing Taiwan’s ‘silicon shield’: Is the semiconductor industry that safeguards the island’s freedom now at risk?

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The Star talks to employees of manufacturing giant TSMC amid uncertainty around industry’s ability to navigate new U.S. rules, shifting geopolitics.

Members of an engineering team must go in to fix the glitch, but before they do, the two change into “cleanroom” suits in a contamination control room. Blasts from an air shower whisk away stray particles.

Taiwan has dominated global chip manufacturing for so long that the industry is called Taiwan’s “silicon shield” — a deterrent to war.64 per cent of global chip foundry revenue as of April 2022. Of that, TSMC took the vast majority with its domestic competitor United Microelectronics Corp. making about seven per cent of global revenue.

“The stronger Taiwan’s semiconductor sector, the more secure Taiwan becomes, because military aggression from China towards Taiwan would hurt the Chinese economy. And from the U.S. perspective, assuring Taiwan’s security is the same as assuring America’s security in semiconductor supply,” Lee said.Between the pandemic, the war in Ukraine and the deterioration of U.S.

At TSMC’s headquarters in Hsinchu Science Park, a sprawling industrial zone near Taiwan’s northwest coast, employees have little reason to venture outside. “We don’t compete with our clients,” public relations officer Michael Kramer told the Star last month as he gave a tour of the headquarters, where only approved visitors may enter. A Taiwan-born former journalist, Kramer has fielded an “explosion” of international interest in his company, which had largely flown under the radar, despite its longtime partnerships with the world’s best-known tech companies, including Apple, Qualcomm, MediaTek and Nvidia.

While a few companies including TSMC and Samsung obtained one-year waivers to continue importing American manufacturing equipment to their plants in mainland China, the move from Washington to choke off China’s access to advanced chip technology has thrown a wrench in previously routine flows of people and technology.

The TSMC referred the Star to comments during a recent earnings call, where CEO C.C. Wei emphasized that the regulations “set the control threshold at very high-end specifications, which are primarily used for artificial intelligence or supercomputing applications.” The initial assessment suggested that the impact on TSMC is “manageable,” he said.

 

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