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Feds Keep Pushing TSMC to Make Chips in the US

(Image credit: Shutterstock)

According to a Nikkei Asian Review report today, the U.S. government continues to pressure TSMC to make some of its chips, including those used in Lockheed Martin F-35 Lightning II fighter jets, in the U.S. in fears of interference from the Chinese government. 

This isn't the first time we've heard claims that the U.S. government is pressuring TSMC some of its chip production, as Bloomberg reported the same thing in November. At the time, TSMC chairman Mark Liu said the company didn't want to make that move.

TSMC's apparently a bit more diplomatic now. 

"We have never ruled out building or acquiring a fab [semiconductor fabrication plant] in the United States, but currently there is no concrete plan," the company told Nikkei. 

The report also said that the U.S. government's requests were more specific than previously thought. The U.S. has reportedly pushed TSMC to make "military-use chips" in the U.S. and doesn't seem concerned about other chips.

"We've noticed that many U.S. tech executives and government officials are concerned about their country's dependence on TSMC and the security of their defense industry’s supply chains," Taiwan Institute for National Defense and Security Research Director Su Tze-yun told Nikkei.

"That’s why the U.S. constantly hopes that TSMC could stand with them to make chips somewhere else other than just Taiwan, which they think is not completely safe because China has not ruled out the possibility of taking control of the island by force."

Those efforts aren't likely to end any time soon. With tension between the U.S. and China continuing to mount--even as the countries reportedly near a trade agreement--we suspect U.S. officials will continue to push TSMC to move.

  • velocityg4
    They're a business. Pay them to build a fab in the US. TSMC spent $9.3bn on Fab15 in Taiwan. I'm sure they'd be perfectly happy to use a Fab in the US for the military, US contractors and many other companies if it was paid for. That amount of money is a drop in the bucket for the current yearly military budget. Especially if it means chip security. Plus that cost would be amortized over multiple years.

    Given how long military hardware stays in service. That Fab could continue in service for a long time.
    Reply
  • digitalgriffin
    The US Gov't owns several fabs for specialty chips. However they are all extremely dated tech.

    Pay TSMC the cost to build a new one, and then licensing royalties. But let the US Gov't keep it and admin it. That way it can't be changed or shut down on a whim due to the Chinese Gov't.
    Reply
  • margrave
    The phrases "running a business" and "let the government keep it and admin it" are thoroughly incompatible.
    Reply
  • Giroro
    velocityg4 said:
    They're a business. Pay them to build a fab in the US. TSMC spent $9.3bn on Fab15 in Taiwan. I'm sure they'd be perfectly happy to use a Fab in the US for the military, US contractors and many other companies if it was paid for. That amount of money is a drop in the bucket for the current yearly military budget. Especially if it means chip security. Plus that cost would be amortized over multiple years.

    Given how long military hardware stays in service. That Fab could continue in service for a long time.


    $9.3Billion is not a drop in the bucket... Unless you have a bucket that only contains 75 drops, but that's smaller than a teaspoon, according to google.

    If your bucket holds 5 gallons, 9.3 billion is about the size of an 8 ounce cup.
    ..and then you have to decide what other programs get shut down and who gets laid off in order to free up that cup in the bucket.
    Reply
  • velocityg4
    Giroro said:
    $9.3Billion is not a drop in the bucket... Unless you have a bucket that only contains 75 drops, but that's smaller than a teaspoon, according to google.

    If your bucket holds 5 gallons, 9.3 billion is about the size of an 8 ounce cup.
    ..and then you have to decide what other programs get shut down and who gets laid off in order to free up that cup in the bucket.

    Assuming the fab ran for only five years. When amortized for five years it would only be 0.27% of the DOD yearly budget. That's a small price to pay for chip manufacturing security. Although it would likely be used for much longer. Given how long military tech stays in service.

    That security would mean the DOD has a reliable source of chips in times of war. Not only that. A source free of potentially malicious embedded chips. Assuming the US Gov admins it and pays licensing rights instead. As @digitalgriffin suggested.

    The cost could be further offset by other government departments. As agencies like the NSA, Homeland Security, NASA, DOE, SEC, &c would also use the locally sourced chips.
    Reply
  • Murissokah
    Building a FAB for military use only could present a few challenges for TSMC. Their business is very large scale and their costs and processes are built around that. Even if they built every single piece of military chip for the US, which would be a problem in itself, it would probably still be way too low to achieve reasonable prices.
    Reply
  • TCA_ChinChin
    Their name is literally Taiwan Semiconductor Manufacturing Company. Why should they have to listen to the US government about building fabs in the US at all, unless there is a business or monetary incentive? Yes, they have plenty of manufacturing that is based in the PRC, but they don't have to answer to the CCP. If anything, they are more under the jurisdiction of the Taiwanese government. Above all, they are a business. If it made monetary sense to move more manufacturing to Taiwan or the US, or some other country, they will do it and the geo-politics that come with dealing the CCP might push them to do that. However, until that moment comes, the only thing this looks like to me is government oversight in pushing a private company, something that I thought the current administration doesn't approve of.
    Reply
  • alextheblue
    TCA_ChinChin said:
    Their name is literally Taiwan Semiconductor Manufacturing Company. Why should they have to listen to the US government about building fabs in the US at all, unless there is a business or monetary incentive? Yes, they have plenty of manufacturing that is based in the PRC, but they don't have to answer to the CCP. If anything, they are more under the jurisdiction of the Taiwanese government. Above all, they are a business. If it made monetary sense to move more manufacturing to Taiwan or the US, or some other country, they will do it and the geo-politics that come with dealing the CCP might push them to do that. However, until that moment comes, the only thing this looks like to me is government oversight in pushing a private company, something that I thought the current administration doesn't approve of.
    The concern isn't so much what is happening today with TSMC. The concern is what happens when China seizes Taiwan by force and tells the world "this is ours". Outside of the US I'm not sure anyone would even try to stop them. The EU will go full appeasement (not for the first time), nobody else in Asia has the power to stop them, the Russ would approve, and so on.
    Reply
  • JWolfe
    I think you mean wary, not weary, in the sub title!
    They are an interesting pair of words to vary by one letter only.
    Reply
  • traxxmy
    LOL "weary of interference " china?. I'm more worry about US spying and love to create war and attack people. Now i will choose other product if i see it is "made in usa". Just few day ago i even move my dropbox cloud storage to koofr. More secure from prying US.
    Reply