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(Bloomberg) – An effort by the Biden administration to unravel grunts of global chip supply meets resistance from lawmakers and leaders in Taiwan and South Korea, complicating attempts to resolve bottlenecks ‘bottlenecks that hurt industries from automotive to consumer electronics.
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Late last month, the U.S. Department of Commerce asked companies in the semiconductor supply chain to fill out questionnaires by November 8 for information on the current chip shortage. Although the request is voluntary, Commerce Secretary Gina Raimondo has warned industry officials that the White House could use the Defense Production Act or other tools to force its hand if they don’t respond.
The problem has become particularly thorny in Taiwan, home to Taiwan Semiconductor Manufacturing Co., which accounts for more than half of the global contract chip manufacturing market. This dominance has already prompted rivals like Intel Corp. to call for more domestic investment and prompted the governments of the United States, the EU, Japan and China to reflect on efforts to strengthen their own chip industries to reduce their dependence on the the world’s most advanced semiconductor manufacturing center.
“TSMC will not pass on any sensitive information, especially customer data,” Sylvia Fang, general counsel for the company, told reporters on Wednesday. Three of TSMC’s top five customers are US, with the largest Apple Inc. accounting for a quarter of total sales. “TSMC is always evaluating how to react. “
A smaller counterpart, United Microelectronics Corp., declined to comment on its response to the U.S. query, although CFO Liu Chi-tung told Bloomberg News the company would protect non-public customer information.
Meanwhile, the South Korean Ministry of Trade, Industry and Energy released a statement on Wednesday expressing concerns about the scope of the US request. Other media outlets, including Korea Joongang Daily, have also quoted unidentified people at local chipmakers as saying they may find it difficult to comply with the demands.
The potential deadlock comes as chip shortages go from bad to worse. Industry lead times – the gap between ordering semiconductors and receiving delivery – increased for the ninth consecutive month to an average of 21.7 weeks in September, according to Susquehanna Financial Group. This is by far the longest since the company started tracking data in 2017.
In the U.S. questionnaire, chipmakers were asked to comment on inventory, delays, delivery times, sourcing practices, and what they were doing to increase production. The trade also asks for information about the main customers of each product. But the department realized that many were struggling with the questionnaire, and it is preparing an FAQ to help companies answer, TSMC’s Fang said.
Read more: White House weighs in on invocation of defense law to get data on chip
“If the United States is looking to resolve supply chain issues, we’ll see how we can best help them,” Fang said. “We have done a lot to help, including increasing the production of automotive chips and prioritizing automotive customers to some extent.”
The chip tightening is expected to cost global automakers $ 210 billion in sales this year. They will build 7.7 million fewer vehicles in 2021, according to AlixPartners’ latest estimates released in September, nearly double the previous forecast of 3.9 million.
The US reach of chipmaker data has also encountered resistance from Taiwanese politicians and shareholders. The island’s Ministry of Economic Affairs said on October 2 that the island’s chipmakers would not provide information relating to “trade secrets” without the consent of customers, offering support when contacting them. clients and the White House. But that did not quell protest from opposition lawmakers.
“Taiwan should not automatically give in when it comes to dealing with the United States,” Kuomintang caucus main whip Alex Fai said Wednesday, according to local media. “If we provide the United States with all the information they are looking for, will TSMC still be competitive in the world in the future?” “
Separately, an individual investor filed a petition with a district court in Taiwan earlier this week to prevent TSMC from transmitting sensitive information, including the names of its clients to foreign governments, according to Rachel Huang, a lawyer representing the no one at Liu & Partners in Taipei.
(Updates with more comments from the Taiwan government statement.)
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