TSMC dragged to the altar of US manufacturing

May 18, 2020 //By Peter Clarke
Opinion: TSMC dragged to the altar of US manufacturing
The double-whammy of enhanced restrictions on Huawei and HiSilicon from the US, plus the announcement of TSMC's plan to build a 5nm wafer fab in Arizona has the feel of stage management about it.

There are also one or two indicators that TSMC's plan is potentially provisional; at least to the extent that all such announcements can be subject to change, or delay – or even cancellation.

On Thursday, the Department of Commerce praised TSMC's decision to build a wafer fab in Arizona, although time differences could have made that contemporaneous with TSMC's press release dated Friday, May 15. TSMC stated that it plans to spend $12 billion on a 5nm wafer fab in Arizona (see TSMC picks Arizona for 5nm wafer fab). And then on Friday the DoC specifically called out Huawei as being the reason for enhanced restrictions on supplying chips that are made with US software or manufacturing equipment – which applies to almost all digital chips and anything made in advanced process technologies (see US tightens restrictions on Huawei's chip supply).

In the case of Huawei, the argument offered up by the United States' Department of Commerce seems contrived. The Department of Commerce argues that it has had to enhance restrictions because, since being put on the "entity list" in May 2019, Huawei had been trying to undermine US export controls by using foundries to make its chips.

Huawei and its semiconductor subsidiary HiSilicon have always been fabless. So, the use of foundries has always been a fundamental part of its business model. TSMC which supplied a great deal of silicon to HiSilicon in 2019 – reportedly worth 14 percent of TSMC's revenue (see HiSilicon breaks into top ten chip vendor ranking) – has always said it follows legislation and rules and clearly has felt it has been doing so up until now.

Be that as it may, there has been speculation for months that the US administration wants to thwart the progress of Huawei while it still can. And this has been against the protestations of national and international industry bodies.

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