Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      The little-known company disrupting Eskom’s monopoly

      16 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      Chief sub-editor wanted – help shape South African tech media

      16 June 2025
    • World

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Electronics and hardware » US won’t tolerate technology fence-sitters any longer

    US won’t tolerate technology fence-sitters any longer

    By Agency Staff11 May 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Ever since Donald Trump fired the first shot in the US trade war with China, one technology company has been sitting in the middle, trying to avoid the crossfire. It’s wonderful to be able to sell weapons to all sides, until one forces you to choose. Taiwan Semiconductor Manufacturing Co is in the enviable position of being a critical supplier to both countries. The company, headquartered in famed Hsinchu Science Park, makes the world’s most advanced chips for the likes of Apple, Qualcomm, Nvidia and Huawei Technologies.

    The US fear, as portrayed by the White House, Pentagon and commerce department, is that allowing China to procure the world’s best semiconductors while America is unable to make them at home is an urgent and critical national security threat. That’s spurred a two-pronged strategy in recent years: limit Chinese access to and development of chip technology, and bolster domestic prowess.

    TSMC’s strategy has been to stay neutral. It has most of its capacity in Taiwan, one new and one not-so-new factory in China, and an old facility in Washington state. A year ago, I wrote that chairman Mark Liu had politely pushed back against pressure to expand in America, citing the steep costs. I concluded: “TSMC won’t be able to sit on the fence forever. While Liu may want to just make chips, he’ll eventually have to make a choice.”

    TSMC won’t be able to sit on the fence forever. While Liu may want to just make chips, he’ll eventually have to make a choice

    That day has come.

    The coronavirus pandemic has highlighted Washington’s need to protect supply chains from disruption, and heightened concerns about reliance on Taiwan, as the Wall Street Journal reported over the weekend. To that end, the administration is pushing hard to get chip makers, including Intel, TSMC and Samsung Electronics, to expand in the US, and to use their best technology, the WSJ wrote.

    Unsurprisingly, Intel is making the case that the US should strengthen its domestic production for “geopolitical” reasons. The company has most of its staff, and more than half its plants and equipment, in the US, including manufacturing in Arizona, New Mexico and Oregon.

    Fallen behind

    While best known for supplying processors used in PCs and servers under its own name, Intel also operates a foundry business that does contract manufacturing using clients’ own designs. Once the world leader in chip production, the Santa Clara, California-based company has fallen behind and now trails TSMC and South Korea’s Samsung.

    Intel clearly sees an opportunity. If it can convince defence and commerce officials that it’s in the national security interest to mandate that at least some chips be made domestically, then it may have a shot at getting back into the foundry game.

    TSMC has been trying to push back, or at least to get a seat in the policy discussions. It recently hired former Intel lobbyist Peter Cleveland to coordinate its efforts in Washington. As the old saying goes, “If you’re not at the table, then you’re on the menu.”

    But the other aspect of American strategy may be harder for the Taiwanese company to negotiate. Beyond expanding domestic capacity, Washington wants to limit Chinese access. To do so, the Trump administration is considering new rules to curb the use of US equipment and materials in making chips for the likes of Huawei, arguing that the Chinese company is a conduit for Beijing’s espionage.

    That’s put TSMC and numerous other companies in a difficult position. The American market accounted for 59% of its sales last year, against 19% for Chinese clients. Yet the growth momentum clearly favours the world’s largest country, which is focused on developing components used in artificial intelligence, 5G communications, surveillance and possibly weaponry.

    TSMC has attempted to play Switzerland. A year ago, the company was sticking with the line that, “We are everybody’s foundry.”

    Today, with China showing increasing belligerence and the US supporting a greater global voice for Taiwan, the mood has shifted

    Washington increasingly wants TSMC to be its foundry alone. Pressure has ramped up significantly over the past year, with the long list of US clients and significant revenue contribution being used as a battering ram to make the point that America is the side to choose. Ten years ago, when Taipei-Beijing relations were friendlier, companies may have leaned toward China. Today, with China showing increasing belligerence and the US supporting a greater global voice for Taiwan, the mood has shifted.

    It’s true that China is an important and growing market — Beijing has used that momentum to bring global companies to its shores — yet it won’t replace the US in terms of size or technology leadership in the next 20 years. To assuage concerns, and win a reprieve on restrictions about supplying to China, TSMC has little choice but to offer something to the Americans.

    After years of delay and resistance, it’s time for TSMC to build a shiny new factory in America. Expect to hear the company announce concrete plans, and large dollar figures for US investment, in the next year or so.  — By Tim Culpan, (c) 2020 Bloomberg LP



    Donald Trump Huawei Intel Mark Liu Samsung top TSMC
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleNumber porting may now resume, government says
    Next Article Gautrain expansion may only kick off at the end of 2024

    Related Posts

    Coal to cash: South Africa gets major boost for energy shift

    13 June 2025

    China is behind in AI chips – but for how much longer?

    13 June 2025

    10 red flags for Apple investors

    13 June 2025
    Company News

    Huawei Watch Fit 4 Series: smarter sensors, sharper design, stronger performance

    13 June 2025

    Change Logic and BankservAfrica set new benchmark with PayShap roll-out

    13 June 2025

    SAPHILA 2025 – transcending with purpose, connection and AI-powered vision

    13 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.