What's Happening?
Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest semiconductor manufacturer, is set to keep its most advanced technology within Taiwan, as per the country's 'National Core Technologies'
regulations. This decision means that TSMC's U.S. facilities, including those in Washington and Arizona, will not receive the latest 1.4 nm silicon manufacturing technology, which is expected to go into full production by 2027. Instead, these U.S. fabs will only be able to produce older 1.6 nm chips. The regulations stipulate that only technology at least two generations old can be transferred outside Taiwan. This policy was discussed during a session of Taiwan's Legislative Yuan, where concerns were raised about maintaining key R&D advancements within the country. The National Science Council Vice Chairman Lin Fa-cheng confirmed that the list of 'national core technologies' is reviewed annually to ensure compliance.
Why It's Important?
The decision to keep cutting-edge semiconductor technology in Taiwan has significant implications for the U.S. semiconductor industry. With TSMC's U.S. facilities unable to access the latest technology, American companies may turn to Intel, which has a strong domestic presence, for advanced chip manufacturing. This could bolster Intel's position in the U.S. market, providing it with a competitive edge over TSMC in terms of local production capabilities. The move also highlights the strategic importance of semiconductor technology in national security and economic competitiveness, as countries seek to maintain control over critical technological advancements. For the U.S., this development underscores the need to invest in domestic semiconductor manufacturing to reduce reliance on foreign technology.
What's Next?
As TSMC continues to focus its most advanced manufacturing capabilities in Taiwan, Intel is poised to capitalize on the opportunity to expand its market share in the U.S. The company is expected to leverage its existing infrastructure and upcoming product lines, such as the Panther Lake CPU, to attract businesses seeking cutting-edge technology produced domestically. Meanwhile, TSMC's U.S. investments will be closely monitored by Taiwan's Ministry of Economic Affairs to assess their impact on the semiconductor industry and national security. This ongoing scrutiny may influence TSMC's future investment decisions and strategies in the U.S. market.
