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Yahoo
30-04-2025
- Business
- Yahoo
Taiwan's government strengthens 'silicon shield,' restricts exports of TSMC's most advanced process technologies
When you buy through links on our articles, Future and its syndication partners may earn a commission. Taiwan plans to tighten control over exports of advanced process technologies as well as outbound semiconductor investments, reports Economic Daily. The new legal measures will enforce the 'N-1' technology restriction, essentially barring TSMC from exporting its latest production nodes, and introduce penalties for violations— but there's a major catch for TSMC. The 'N-1' policy, confirmed by Premier Cho Jung-tai, will apply to TSMC's planned production in the United States. This approach restricts export of the most advanced process technology, allowing only one generation older to be deployed abroad. Before this amendment, Taiwan's regulations did not explicitly require such controls for semiconductor manufacturing processes. These rules are based on Article 22 of the amended Industrial Innovation Act, which is expected to take effect by the end of 2025. There is a major catch about TSMC's most advanced process technology, though. Today, TSMC has one leading-edge node: N3P manufacturing technology. But by the end of the year, it will start producing chips on its N2 fabrication process, which will become its flagship. Starting from late 2026 and onwards, however, TSMC expects to have two flagship nodes: N2P for client applications that do not need advanced power delivery and A16 with Super Power Rail backside power delivery for HPC applications that consume a lot of power. It remains to be seen which process technology will be considered as 'flagship' by Taiwanese authorities, and therefore export restricted, or if the government will ban exports of both nodes for a year when TSMC introduces successors for N2P and A16, its A14 and A16P nodes. In addition, the amended law, passed after its third reading in the Taiwan parliament, gives Taiwan's authorities the right to reject or cancel overseas investments if they are found to compromise national security, damage the country's economic development, violate treaty obligations, or result in unresolved major labor disputes. Under the new law, these six conditions are retained, but are now backed by higher-level legislation. The revised Article 22 also includes the possibility of partially or fully rejecting investments or attaching conditions to approval. If a company receives approval but later triggers any of these risks, the central authorities are authorized to demand corrective action or revoke the investment entirely if the issue is serious. The new law elevates existing investment restrictions from sub-regulations to formal legislation and adds legal consequences for non-compliance. The Ministry of Economic Affairs stated that the law's implementation date will be announced only after the sub-regulations are revised, within six months. This means the earliest enforcement could begin by late 2025. The regulation's rollout comes amid rising geopolitical risks and after TSMC announced plans to increase its investments in its American production capacity from $65 billion over four years to $165 billion over an undisclosed period. The amendment also introduces penalties that were not present before. Companies that invest abroad without prior approval may face fines ranging from NT$50,000 to NT$1 million ($30,830). If an investment is approved but the company later fails to correct identified violations — such as endangering national security or harming economic development—the authorities can impose repeated fines of NT$500,000 ($15,414) to NT$10 million ($308,286). But given that TSMC plans to invest $165 billion in its U.S. facilities, a $300,000 fine will hardly affect the company's bottom Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.


The Independent
05-03-2025
- Business
- The Independent
Taiwan downplays national security concerns after Trump and TSMC's $100bn semiconductor deal
would ensure that its most advanced semiconductor technology does not go out of the island, the presidential office said, after the world's largest contract chipmaker signed a $100bn deal with Donald Trump. Taiwan presidential office spokesperson, Karen Kuo, said the government was aware of the Taiwan Semiconductor Manufacturing Company Limited (TSMC) deal which must go through government assessments to safeguard the interests of the island as well as the investors. Ms Kuo said TSMC 'will keep its most advanced manufacturing processes in Taiwan'. 'Following TSMC's US$100bn investment in the US, Taiwan will work to ensure our high-tech industries remain competitive while expanding their global presence, paving the way to building resilient semiconductor supply chains with our partners & a stronger Taiwan-US partnership,' a statement on X said. It follows fears that the deal could undermine the island's national security as the industry remains crucial to the economy and the country's defence. The deal was announced on Monday by Mr Trump and chief executive of TSMC, CC Wei, to invest an additional $100bn over the next four years to expand semiconductor operations in the US. It was on top of more than $65bn investment already. TSMC, the world's biggest semiconductor manufacturer, produces chips for companies including Apple, Intel, and Nvidia. 'We're going to produce many chips to support AI progress and to support the smartphones' progress, and we thank President Trump again for his support,' Mr Wei said, adding that the deal will create thousands of high-tech manufacturing jobs. Mr Trump, who has repeatedly accused Taiwan of 'stealing' the US semiconductor business, said the deal will allow TSMC to avoid industry-wide 25 per cent tariffs. 'By doing it here, he has no tariffs,' Mr Trump said, when he was questioned his threats of tariffs have played in influencing companies' decisions to invest in the US. Ms Kuo cited the Industrial Innovation Act and said the companies must obtain approval from the government for foreign investments above $45.5m. She added that the government was drafting a plan to forge resilient and diversified semiconductor supply chains with the US and other partners. Government statements indicated that TSMC had not yet sought the necessary approvals for foreign investments of that scale at the time of the deal's announcement. Opposition leaders in Taiwan have said the deal could undermine the country's defence. KMT's legislative caucus, Fu Kun-chi, questioned: 'Where is Taiwan's national security if TSMC become ASMC (American Semiconductor Manufacturing Company) and the sacred mountain that protects the country is gone?' On Tuesday, Mr Trump said the US should get rid of the 2022 bipartisan law that give $52.7bn in subsidies for semiconductor chips manufacturing and production and use the proceeds to pay debt. "The CHIPS act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn't mean a thing. They take our money and they don't spend it," Mr Trump said in a speech to Congress. "You should get rid of the CHIPS Act and whatever is left over, Mr Speaker, you should use it to reduce debt." The CHIPS and Science law signed by then-president Joe Biden in August 2022 included $39bn in subsidies for US semiconductor manufacturing and related components along with $75bn in government lending authority.