In a hearing before the U.S. Congress on Tuesday (Feb. 23), former Google CEO Eric Schmidt pointed out that Taiwanese semiconductor maker TSMC is critical to the national security of the United States. At an internal seminar held by Foreign Policy magazine on the same day, it was also pointed out that TSMC has been dragged into the U.S.-China competition due to its special position in the global semiconductor industry. “Why exactly does TSMC worry the Americans?
The United States relies heavily on Taiwan chips
The U.S. Senate Armed Services Committee held a hearing on “Emerging Technologies and Their Impact on National Security” on Tuesday. At the hearing, Schmidt pointed out that the United States relies heavily on TSMC’s chip supply.
If you want to produce leading-edge hardware products, that’s what we need to produce,” he said. You may need a supplier from Taiwan, and that’s TSMC. Their product is much faster and much better.”
“TSMC,” or Taiwan Semiconductor Manufacturing Co., or TSMC, headquartered in Hsinchu, Taiwan, is the world’s largest foundry, and wafers refer to the silicon wafers used to make silicon semiconductor circuits. Wafers are the silicon wafers used to make silicon semiconductor circuits. Taiwan accounts for 65% (some say 77.5%) of the global foundry market, with TSMC accounting for the majority of that share.
U.S. companies such as NVIDIA, Qualcomm, AMD and Apple rely on TSMC’s wafer foundries. In other words, about 65% of the demand in the US market is met by TSMC.
In addition, TSMC is also the world’s largest and best chip producer. TSMC has the most advanced 7nm process technology available and is developing and preparing a 3nm process for mass production. In addition, TSMC has made breakthroughs in the development of advanced processes at 2nm. With more than half of the world’s chips coming from TSMC, TSMC has turned itself into the center of the technology supply chain. TSMC chips are used in Apple’s iPhones, Amazon’s Cloud Computing, graphics processors for video games, and even Lockheed Martin’s F-35 fighter jets.
According to reports, TSMC’s main competitor in the market, Samsung Electronics, may take a decade to catch up. And China’s best chip manufacturing company, SMIC, just completed mass production of 14 nanometers in 2020, which is the level of TSMC five years ago.
Because of TSMC and the strength of Taiwan’s chip production, given the current bottleneck in the supply of chips used in the automotive industry, Taiwan’s Ministry of Economic Affairs recently said that it has received requests from multiple countries with shortages of automotive chips.
In the 1990s, the United States was the main force in the production of semiconductor chips, accounting for about 37% of the world, but now the U.S. semiconductor production of self-production rate of only 12% of the national demand. Schmidt, the former CEO of Google, said the U.S. wants to be at least two generations ahead of China in chip production and must bring semiconductor production back Home.
Schmidt, a former CEO of Google who also served as a science and technology adviser to the U.S. Department of Defense, led the China Strategy Group, a think tank that released a report on Jan. 26 titled “Asymmetric Competition: A Strategy for China’s Technology Competition. Strategy for China & Technology. In particular, the report notes that next-generation chip technologies (including semiconductor chips and biochips) are critical to the U.S. because they can “catch” China by the neck, are incremental technologies that can increase the overall rate of innovation, and are closely related to national security.
In the report, Schmidt and his colleagues recommend that the Biden administration restrict China in key technology areas, while joining with allies to form a technology alliance to deal with China.
“TSMC’s Vulnerability, U.S. Must Ensure TSMC Is Not Controlled by Communist China
Sen. Tom Cotton of Arkansas, a Republican member of the U.S. Congress, said at the hearing that it would be dangerous for the United States to rely heavily on Taiwan chips because of China’s preoccupation with Taiwan.
He said: “I just want to point out that we are very dependent on TSMC, but for China, they are also quite vulnerable. We’re talking about a country that could come under direct attack from China. China wants to use force to forcibly occupy (Taiwan’s) territory. That’s why Taiwan is not only a strategic and moral issue for Americans, we have to make sure that the Chinese Communist Party doesn’t take control of TSMC, the world’s most important chipmaker.”
Cotton, along with other Republican and Democratic lawmakers, introduced the American Foundries Act Of 2020 (AFA, The American Foundries Act Of 2020) last July. The purpose of this bill is to encourage the development of the U.S. domestic chip industry. If the bill is approved, the United States will invest a total of $ 25 billion in state chip manufacturing, defense chip manufacturing.
The U.S. Congress has long noted the continued decline of the chip manufacturing industry will endanger economic growth and national security. Before that, Congress also introduced the “Create Effective Incentives for Semiconductor Production Act” (CHIPS for America Act).
Stephen Ezell (Stephen Ezell), vice president of global innovation policy at the Information Technology and Innovation Foundation, a U.S. think tank, told the Voice of America that there is a real strategic risk that so many U.S. high-tech companies rely exclusively on TSMC.
He said, “The risk is not relying entirely on one company per se, but on a company that is caught in a strategic hot spot. While TSMC is a great innovator and a reliable partner. But the concern is not there. The concern is more strategic.”
TSMC has been wrapped up in the U.S.-China competition
Meanwhile, China is not self-sufficient in chip manufacturing. China is a net importer of semiconductors, according to a new Foreign Policy magazine report on the U.S.-China semiconductor competition. Although China says it is striving to be self-sufficient in chip production, the Foreign Policy report says it will not be able to “reach its goal of semiconductor self-sufficiency” in the next five to 10 years.
TSMC is also China’s largest chip supplier, supplying chips to China’s huawei, smartphone maker Xiaomi, computer maker Lenovo and electric car makers, among others. And because of its central position in the chip ecosystem, TSMC has been wrapped up in the U.S.-China competition.
TSMC’s founder, Chang Chung-Mou, said in November 2019 that the world is no longer a peaceful one, and TSMC has become “a must for geo-strategists.
Last May, the U.S. Department of Commerce issued a rule that any company supplying semiconductor products containing U.S. technology to Huawei must first obtain an export license from the U.S. government. TSMC bore the brunt of this rule and had to announce that it was cutting off supplies to Huawei.
At about the same Time, TSMC announced its intention to build and operate an advanced fab in the U.S. with the mutual understanding and commitment of the U.S. federal government and the State of Arizona. The fab is scheduled to begin construction in February of this year.
TSMC said the new fab will use the company’s 5nm process technology to produce semiconductor chips, with a planned monthly capacity of 20,000 wafers. There are reports that TSMC is mainly producing military chips in Arizona, which is expected to come on stream in 2024, and that the U.S. government will provide subsidies for the project.
In addition, the latest reports said that the U.S. President Joe Biden (Joe Biden) will sign an executive order as early as this month, the United States will work with Japan, South Korea, Taiwan and Australia to accelerate the degree of dependence on Chinese-made chips and other strategic materials supply chain.
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