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The U.S. sees concentration of cutting-edge tech in Taiwan as vulnerability

  • June 10, 2021
  • , Asahi , p. 9
  • JMH Translation
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By Aoyama Naoatsu, Washington; Nishiyama Akihiro, Beijing; and Ishida Koichiro, Taipei

 

Taiwan Semiconductor Manufacturing Company (TSMC) produces more than 90% of the world’s most advanced semiconductors. The company supplies parts to Apple Inc., and global automakers. Its products are also vital to the military industry, which is one of the main reasons behind the confrontation between the U.S. and China over Taiwan.

 

“More than anything else, the U.S. wants a manufacturing base for cutting-edge semiconductors,” stressed Senior Director for International Economics and Competitiveness Peter Harrell of the White House National Security Council (NSC). He is in charge of international economic affairs. He made the comment during a meeting hosted by a major U.S. telecommunications company held online on May 18.

 

In the future, all kinds of information will be exchanged through high-speed communications, including automated driving, etc. On the military front, too, success will depend on the superiority of data processing and communication technologies, such as drone attacks and code breaking. High-performance semiconductors, upon which these technologies are based, has become a strategic material on par with oil in the 20th century.

 

However, among U.S. companies, Intel, which is also widely involved in the design of integrated circuits, maintains the world’s top position in sales, but is outpaced by TSMC in the manufacture of cutting-edge semiconductors with circuit widths of less than 10 nanometers (one hundred millionth of a meter). Taiwan manufactures 92% of cutting-edge semiconductors and South Korea’s Samsung Electronics, 8%. With the huge profits brought about by this oligopolistic structure, TSMC has been making investments on a scale unrivaled by other companies and has consolidated its position as “number one.”

 

The U.S. government, with a growing sense of urgency, strongly requested TSMC to build a plant in the U.S. As a result, TSMC made a commitment last year to manufacture semiconductors with a circuit width of 5 nanometers, the most advanced in the world today, in Arizona. If TSMC’s cutting-edge factories remain concentrated in Taiwan, they will remain vulnerable to an attack or blockade by China, which has not abandoned the unification of Taiwan by force. If that happens, in addition to wreaking havoc on the economy due to a limited supply of semiconductors, it would impact the U.S. military because advanced semiconductors are used for artificial intelligence in missiles, etc.

 

The Taiwanese government holds more than 7% of TSMC’s shares through investment of money from the industrial development budget and pension funds. The administration of Tsai Ing-wen is well aware of the value of TSMC. In February this year, at the request of the Japanese, the U.S., and the German governments, which were facing a shortage of semiconductors for automobiles, the Tsai administration asked the company to take the unprecedented step of asking the company to increase production. (Abridged)

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