American purchases of computer chip-making machines from Taiwan rose to a record high in March as the United States continues to rebuild its domestic semiconductor industry.
Taiwan Semiconductor Manufacturing Co. (TSMC) and several other major producers in Taiwan are vital players in the global supply chain of computer chips.
Taiwan, the world’s largest producer of high-end semiconductor chips, saw its chipmaking machine exports to the United States rise 42.6 percent last month from a year earlier to a new high of $71.3 million, according to data from the country’s Ministry of Finance reported Bloomberg.
Meanwhile, exports to Mainland China plummeted 33.7 percent for the ninth straight month of decline as tensions have risen with Beijing.
Taiwan’s diminishing exports of chip machines to China is one sign that a technological war between the two largest economies is heating up.
Threats by the CCP towards Taipei have made America’s heavy reliance on Taiwan and other Asian nations for the essential chips increasingly untenable.
Strategic concerns about the island’s vulnerability, which the Chinese communist regime claims as a renegade province, prompted steps by American officials to move more advanced chipmaking equipment to the U.S. mainland.
The pandemic also exposed the West’s dependence on chips from East Asia with massive shortages of semiconductors causing production stoppages worldwide, causing slowdowns in industrial production, and hurting the global economy.
Chip Factories in America
TSMC will build two fabrication plants in Arizona for $12 billion, prompted by state subsidies and local government support.
The company announced plans in 2020 to build the first production facility, which is expected to be fully operational by 2024 and will initially make 20,000 wafers of relatively advanced 5-nanometer chips per month.
TSMC’s second plant in Arizona will make the more advanced 3-nm chips.
The White House is using the $50 billion in subsidies via the CHIPS and Science Act to bolster domestic semiconductor manufacturing.
TSMC is likely to receive billions in subsidies from the legislation.
Intel and South Korea’s Samsung have also announced plans to build high-end facilities in the United States.
Denying CCP Access to Sensitive Technology
Since the Trump Administration, the U.S. government has been pushing a worldwide effort to limit China’s access to sensitive semiconductor technology and the tools to make them.
The Biden administration has continued the attempt to limit Beijing’s ability to acquire advanced technology and products, which could be used for espionage and military purposes.
American suppliers like Applied Materials Inc., Lam Research Corp., and KLA Corp. have been banned from sending some of their most advanced technology to China.
In March, the Dutch government agreed to block China from having access to some of the nation’s most sensitive chip-manufacturing technology.
The Minister for Foreign Trade and Development Cooperation, Liesje Schreinemacher, told the Dutch parliament on March 8, that the proposed limitations on CCP access to sensitively designed advanced equipment using ultraviolet light, to etch circuits on processor chips, was essential on security and human rights grounds.
Last month, Japan also agreed to place new restrictions on exports of 23 types of leading-edge chipmaking technology.
After much hesitancy, other nations in Europe are increasingly on board with keeping the world’s second-largest economy from access to its closely guarded chip technology, while slowly trying to ramp up their own chip production.
Germany and the UK both have blocked takeovers of chips companies or individual factories by Chinese-owned companies in recent months.
Crash CCP Program
Beijing has complained about the restrictions, saying that they threaten the stability of the global supply chain and that national security justifications were bogus.
The Chinese have so far been slow to retaliate against American tech companies—likely to avoid disrupting domestic industries that produce most of the world’s smartphones, tablet computers, and other consumer electronics.
However, CCP head Xi Jinping accused the United States in a speech last month of trying to block China’s development with a campaign of “containment and suppression” and called on the party to “dare to fight.”
Xi has ordered his government to put a major emphasis on producing more advanced computer chips, which are used in everything from smartphones to fighter jets.
Beijing does have its own chip foundries but it can only produce low-end processors used in cars and appliances.
The Chinese are forced to import more than $300 billion worth of advanced chips from abroad each year.
The CCP has been pouring billions of dollars into the development of its semiconductor manufacturing sector and to reduce the need for foreign imports as its push to gain global dominance heats up.
