Thursday, 28 October 2021 09:56

US threat to use Cold War-era law against chip firms spooks TSMC investors Featured

Taiwan Semiconductor Manufacturing Company general counsel Sylvia Fang. Taiwan Semiconductor Manufacturing Company general counsel Sylvia Fang. Courtesy: Taiwan Semiconductor Manufacturing Company

The US is considering the use of a national security law harking back to the Cold War-era to force companies that are part of the semiconductor supply chain to provide confidential data about their operations if they do not respond with answers in 45 days.

The American demand has spooked TMSC's local investors who have filed a provisional injunction in the Taiwan Hsinchu District Court seeking to bar the company from sending critical trade secrets to the US.

The demand was made on 23 September by US Secretary of Commerce Gina Raimondo, during a semiconductor summit hosted by the White House.

The data is being sought ostensibly to identify the bottlenecks causing the current semiconductor shortage and help ease kinks, if any, in the supply chain.

The information sought from companies like Taiwan Semiconductor Manufacturing Company, the globe's biggest fabless operation, is listed below, as published in the US Federal Register.

a. Identify your company’s role in the semiconductor product supply chain.

b. Indicate the technology nodes (in nanometers), semiconductor material types, and device types that this organisation is capable of providing (design and/or manufacture).

c. For any integrated circuits you produce — whether fabricated at your own facilities or elsewhere — identify the primary integrated circuit type, product type, relevant technology nodes (in nanometers), and actuals or estimates of annual sales for the years 2019, 2020, and 2021 based on anticipated end use.

d. For the semiconductor products that your organisation sells, identify those with the largest order backlog. Then for the total and for each product, identify the product attributes, sales in the past month, and location of fabrication and package/assembly.

i. List each product’s top three current customers and the estimated percentage of that product’s sales accounted for by each customer.

e. For each phase of the production process, identify whether your organisation carries out the step internally or externally. For your organisation’s top semiconductor products, estimate each product’s (a) 2019 lead time and (b) current lead time (in days), both overall and for each phase of the production process. Provide an explanation of any current delays or bottlenecks.

f. For your organisation’s top semiconductor products, list each product’s typical and current inventory (in days), for finished product, in-progress product, and inbound product. Provide an explanation for any changes in inventory practices.

g. What are the primary disruptions or bottlenecks that have affected your ability to provide products to customers in the last year?

h. What is your organisation’s book-to-bill ratio for the past three years? Explain any changes.

i. If the demand for your products exceeds your capacity, what is the primary method by which your organisation allocates the available supply?

j. Does your organisation have available capacity? If yes, what is preventing the filling of that capacity?

k. Is your organisation considering increasing its capacity? If yes, in what ways, over what timeframe, and what impediments exist to such an increase? What factors does your organisation consider when evaluating whether to increase capacity?

l. Has your organisation changed its material and/or equipment purchasing levels or practices in the past three years?

m. What single change (and to which portion of the supply chain) would most significantly increase your ability to supply semiconductor products in the next six months?

TSMC's general counsel Sylvia Fang said last week that the company was trying to work out how it could respond to the American demands without compromising its clients' sensitive trade secrets.

Asia Times quoted Fang as saying: "We will definitely not leak our company's sensitive information, especially that related to our customers.

"We are still at the stage of doing some preliminary research and evaluating the contents of the questionnaire."

She added that the US had come to the realisation that many companies have questions so it was preparing a FAQ and TSMC was waiting for that as well.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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