Rising Taiwan-China and U.S.-China tensions have brought “more serious” challenges for the semiconductor industry, Taiwan Semiconductor Manufacturing Company Ltd TSM Chair said Mark Liu at the Taiwan Semiconductor Industry Association’s annual convention.
While the chips sector is already bracing for sagging demand as red-hot inflation squeezes spending, Taiwan faces a stricter situation sandwiched between its largest export market China and its main international backer and arms supplier, the U.S., Reuters reports.
“We do business on both sides of the Strait. So we can’t listen to the U.S. and not do any business with mainland China. Then what would everyone eat?” Powerchip Semiconductor Manufacturing Corp chair Frank Huang said. “Our industry’s position is to maintain our competitiveness.”
TSMC, which makes most of its chips in Taiwan, cut its annual investment budget by at least 10% for 2022 and struck a more cautious note than usual on upcoming demand.
U.S. embargo on China will likely have broad repercussions, including Taiwan.
The controls also barred U.S. citizens or entities from working with Chinese chipmakers without explicit approval and limited the export of manufacturing tools that would allow China to develop its equipment.
Taiwan has concerns about China, especially efforts by Chinese companies to poach chip talent and technical know-how. The government restricted Taiwanese chip investment in China, the island’s largest trading partner.
Taiwan’s worries have increased as China mounted regular military drills near the island.
Price Action: TSM shares traded lower by 1.77% at $62.58 in the premarket on the last check Wednesday.
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