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Worrying important chips have been cut off overseas

Sunday,Nov 03,2019

 Foreign media said that senior US defense officials have frequently met with technology companies in the near future, encouraging US technology industry to rebuild semiconductor production lines in China to prevent TSMC from cutting off supply of US chips and affecting US defense security.

 
The US "New York Times" reported on October 28 that Pentagon officials have recently met privately with high-tech industry executives. The main purpose is to cope with a major issue: how to ensure the supply of advanced computer chips in the future, thereby maintaining the US military superiority.
 
According to the report, anonymous people involved in such talks said that the reason for the talks was that the Pentagon found that the US military is increasingly relying on chips manufactured outside the country, especially those made in Taiwan. Among them, TSMC, which plays an important role in the field of commercial chips, can produce chips for aerospace, satellite, drone and wireless communications. According to people familiar with the matter, Pentagon officials and chip makers are concerned that suppliers in Taiwan will limit or cut off chip supply.
 
Liu Deyin, chairman of TSMC, said that he recently discussed with the US Department of Commerce about the construction of a new factory in the United States. The main obstacle now is funding, which requires a lot of subsidies because the operating costs in the United States far exceed those in Taiwan.
 
According to the report, the US Department of Defense has long been worried. The United States used only electronic components produced by the United States in advanced weapons. However, the production line of chips has been transferred overseas for more than a decade. Many people worry that once there is an uncontrollable factor, the chip The supply will be interrupted. In recent years, the importance of special components has increased rapidly. For example, the extremely important programming chips on the F-35 are developed by Xilinx, but the manufacturing is mainly in Taiwan. There are also some wireless baseband processors for 5G communication, and their manufacturing technologies are in the hands of TSMC.
 
According to reports, TSMC is the world's leading foundry of wafers. In recent years, it has led Intel in technology to reduce chip circuits to enhance performance. Manufacturing advantages make it a foundry of large US chip design companies such as Apple, Qualcomm and NVIDIA, and the chips of these companies are increasingly important in US defense and civilian applications.
 
However, despite the expert group's recommendation that the US government subsidize US chip production, the cost of such advanced plants may be as high as $15 billion (US$ 7.1), plus recurring costs such as operations, technology and supply chains. The problem of subsidies is beyond imagination.

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