U.S. government could resort to heavy-handed tactics to force supply chain information from TSMC
Chipmakers don't want to share trade secrets and customer data with the U.S. government.
What you need to know
- TSMC is considering how to respond to the U.S. government's request for information regarding the company's supply chain.
- The U.S. government has requested that several chip suppliers share information to help address the current global chip shortage.
- TSMC says that it "will definitely not leak our company's sensitive information, especially that related to our customers."
Taiwan Semiconductor Manufacturing Co. (TSMC) is hesitant to fulfill a request from the U.S. government regarding the company's supply chain. The U.S. government has sent out questionnaires to several chip makers to help fix the ongoing global chip shortage. TSMC expressed concerns over customer privacy and trade secrets (via Nikkei Asia).
"We will definitely not leak our company's sensitive information, especially that related to our customers," said Sylvia Fang, TSMC's general counsel. "We are still at the stage of doing some preliminary research and evaluating the contents of the questionnaire."
Chipmakers, including TSMC, have until November 8, 2021 (45 days from when given the questionnaire) to voluntarily provide information to the U.S. Government. The companies are expected to share information regarding key customers, production capacity, and inventories.
If TSMC and others don't voluntarily provide information, the U.S. government could take more drastic action. After a meeting with chip makers, U.S. Commerce Secretary Gina Raimondo said that the Biden administration could resort to Cold War-era national security tactics.
"What I told them is, 'I don't want to have to do anything compulsory but if they don't comply, then they'll leave me no choice,'" said Raimondo to Bloomberg. "I said today we're evaluating all of our options right now, all the tools. I hope not to go there but we need to see some progress and we definitely need compliance."
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2- It is, however, typical behavior of the current administration.
3- TSMC is taking government money to subsidize new production. Specifically a $12B facility in Arizons : that opens them to government scrutiny. There is ample precedent for the government to force information from organizations taking federal money. In this case, they are dishing out $52B and want to make sure they don't end up subsidizing China's military, yet again. It's the golden rule: "Them's as have the gold rule." TMSC has three choices:
2- Refuse/return the money
3- Sue and hope for a miracle
The only caveat is what you alluded to - whether funds were given with strings attached. Then yup, either return the money, comply or risk turning this into a diplomatic issue. Which is neither good for the US or TSMC. However, it's especially not good for the US as the previous administration has tanked the soft power and integrity of the US down the toilet. So, the US will come off looking more like a bully as opposed to ensuring supply chain integrity. The right wing media will also use this to batter the Biden Administration as well - thus feeding more into the bully aspect. It's an extremely thin line for both sides.