The US government’s request for supply chain information from chip firms, including Taiwan Semiconductor Manufacturing Co (TSMC) , has triggered debate in China, where some see Washing’s latest effort to grapple with a global chip shortage as hegemonic and harmful to their country’s interests. The US Commerce Department last month asked chip makers to submit supply chain information, including inventory data, by November 8. The information is being requested from foreign and domestic companies, including semiconductor suppliers Samsung Electronics and Intel , carmakers Daimler and BMW , and gadget and software firms like Apple and Microsoft . “While the Department invites input from all interested parties, it is particularly interested in obtaining information from foreign and domestic entities that actively participate in the semiconductor product supply chain at any level,” the commerce department wrote in its request. If companies do not answer the request by the deadline, “then we have other tools in our toolbox that require them to give us data,” Secretary of Commerce Gina Raimondo said . “I hope we don‘t get there. But if we have to, we will.” While no Chinese companies are directly involved, it has set off alarm bells within the county’s semiconductor industry, which has faced mounting restrictions from US sanctions that curtail access to advanced chip technologies and equipment. The decision by TSMC to comply with the sanctions by halting production for Huawei Technologies Co has devastated the Shenzhen-based company’s smartphone business. The Chinese government has not commented on Washington’s request, but some commentators have warned that the move could help the US craft more targeted sanctions. “This move by the US will help it create domestic jobs, accurately acquire international companies with potential, and place sanctions on key Chinese companies,” said Xi Chen, an academic committee member at Peking University’s Institute for Global Cooperation and Understanding. “The only way to achieve these things is through identifying key costs.” But Chen, who also advises a think tank affiliated with China’s Ministry of Industry and Information Technology, added that the real impact on the global chip value chain could be limited. TSMC joins US chip coalition in a potential blow to China Some online commentators also worried that the data could help the US advance its own semiconductor industry at China’s expense. “This will provide data that supports policymaking that further suppresses China and develops US domestic chip manufacturing,” wrote one user on China’s Quora-like Q&A site Zhihu , drawing more than 2,000 upvotes. “Addressing the chip shortage is an excuse … It’s aimed at getting deeply involved in the supply chain and carrying out more precise sanctions,” another Zhihu user wrote, garnering nearly 4,000 upvotes. “Using its administrative power to interfere with companies’ internal operations with its long arm, it showed its hegemonic face.” Stewart Randall, head of electronics and embedded software at Shanghai-based consultancy Intralink, said the requested information by Washington “could help the US understand where to allocate its own resources properly to be more efficient with its spending”. Knowing companies’ changes to material and equipment purchasing levels over the past three years, for example, could help the US government determine whether buyers are dropping Chinese suppliers, Randall said. Knowing which products have the highest demand could also help the government understand how American companies might be able to get ahead in the queue, he added. To-hai Liou, a professor at the National Cheng-Chi University in Taiwan, told local media that the information request is “certainly targeting China”. The US wants to further restrict TSMC from selling important chips to China in the future, he said. TSMC did not respond to a request for comment. China’s biggest foundry founder founds another foundry Last year, 17 per cent of TSMC’s revenue came from mainland China, while 62 per cent was from customers based in North America, according to the company’s annual results. The world’s largest contract chip manufacturer has been caught between the US and China amid an intensifying technological rivalry . The Chinese government has been careful not to publicly criticise TSMC, despite its cooperation with Washington. In addition to stopping production for Huawei, TSMC was also forced to drop sales to Tianjin Phytium , which designs chips for China’s supercomputers.
