The efforts of the administration of US President Joe Biden to untangle global chip supply snarls is facing resistance from lawmakers and executives in Taiwan and South Korea, complicating attempts to resolve the bottlenecks hurting industries from automobiles to consumer electronics.
The US Department of Commerce late last month asked companies in the semiconductor supply chain to fill out questionnaires by Nov. 8 seeking information regarding the ongoing chip shortage. While the request is voluntary, US Secretary of Commerce Gina Raimondo has told industry representatives that the White House might invoke the Defense Production Act or other tools to force their hands if they do not respond.
The issue has become particularly thorny in Taiwan, home to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which accounts for more than half of the global contract chipmaking market. That dominance has prompted rivals such as Intel Corp to call for more domestic investment, and spurred governments in the US, EU, Japan and China to mull efforts to bolster their own chip industries to reduce their reliance on the world’s most advanced semiconductor manufacturing hub.
Photo: Grace Hung, Taipei Times
“TSMC absolutely will not hand over sensitive information, particularly client data,” TSMC general counsel Sylvia Fang (方淑華) told reporters on Wednesday.
Three of TSMC’s top five customers are in the US, with the largest, Apple Inc, accounting for a quarter of total sales.
“TSMC is still assessing how to respond,” Fang said.
Photo: Grace Hung, Taipei Times
Smaller peer United Microelectronics Corp (聯電) declined to comment on how it would respond to the US query, although chief financial officer Liu Chi-tung (劉啟東) said that the company would protect customers’ non-public information.
The South Korean Ministry of Trade, Industry and Energy on Wednesday released a statement expressing concern over the scope of the US request. The Joongang Daily also cited unidentified people at local chipmakers as saying that they might have a difficult time complying with the requests.
The potential standoff comes as chip shortages are going from bad to worse. Lead times in the industry — the gap between putting in a semiconductor order and taking delivery — rose for the ninth month in a row to an average of 21.7 weeks last month, the Susquehanna Financial Group said. That is by far the longest since the firm began tracking the data in 2017.
In the questionnaire, chipmakers were asked to comment on inventories, backlogs, delivery times, procurement practices and what they were doing to increase output.
The US Department of Commerce is also requesting information on each product’s top customers.
However, the department has come to realize that many are struggling with the questionnaire and it is preparing an information handout to help companies respond, Fang said.
“If the US is looking to resolve supply chain issues, we will see how we can best assist them,” Fang said. “We have done a lot to help, including increasing output of auto chips and prioritizing auto customers to a certain degree.”
The US reach for chipmaker data has also run into resistance from Taiwanese politicians and shareholders. The Ministry of Economic Affairs on Saturday said that Taiwanese chipmakers would not provide information pertaining to “trade secrets” without consent from customers, offering its support as they communicate with clients and the White House.
That has not quelled the protest from opposition lawmakers.
“Taiwan should not cave in automatically when it comes to dealing with the US,” Chinese Nationalist Party (KMT) caucus whip Alex Fai (費鴻泰) was reported saying on Wednesday. “If we supply the US with all the information it’s seeking, will TSMC still be competitive in the world in the future?”
An individual investor petitioned a district court in Taiwan earlier this week to prevent TSMC from handing over sensitive information, including the names of its customers, to foreign governments, said Rachel Huang (黃雨柔), a lawyer representing the person at Liu & Partners (華通國際法律事務所) in Taipei.
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