May 28 bloomberg revealed that the former u.s. chamber of commerce (US Chamber of Commerce) executive nicolas monterra (Nicholas Montella) in may has joined tsmc as the company's head of government relations. A few months ago, former Intel chief lobbyist Peter Cleveland (Peter Cleveland) became TSMC's vice president of global policy.
According to Bloomberg, TSMC's move aims to mitigate the impact of deteriorating Sino US relations on its operations.
Screenshot of Bloomberg Report
TSMC has confirmed their appointment, according to personal data from Montella and Cleveland on LinkedIn.
Montella has previously focused on policies in Japan, South Korea and the Asia Pacific Economic Cooperation (APEC).
A new round of US restrictions on Huawei is in the works, pushing TSMC into the heart of tensions. If the US Department of commerce finally implements the ban, all orders that TSMC wants to obtain from Huawei in the future need to apply to Washington for exemption.
On the other hand, Taiwan media reported on May 25 that the supply chain revealed that the new US ban on Huawei may disrupt TSMC's order receiving and capacity expansion pace. If the US does not let go, TSMC is likely to announce the next revision of its annual capital expenditure in July's financial statement.
Due to the 120 day grace period granted by the US side, TSMC has made every effort to arrange the shipment of additional 5nm and related manufacturing process orders of up to 700 million US dollars (about NT $12 billion) to Hisilicon within 120 days. Meanwhile, it strives to make suggestions to the US Department of commerce with the US equipment manufacturers during the two-week consultation period of the US Department of Commerce.
Just hours before the U.S. Department of Commerce announced its decision against HUAWEI, TSMC said it would build a $12 billion leading 5 nanometer chip plant in Arizona. The decision aims to ease US national security concerns and shift more high-tech manufacturing to the US.
At that time, a source said that TSMC was in talks with the trump government to build a factory, which will create jobs in the United States and produce sensitive components in the United States for safety reasons.
However, Keith krach, the State Council's second secretary in charge of economic growth, energy and environmental protection, had previously said that there was no guarantee that TSMC would obtain a license to ship Huawei because it promised to build a wafer factory in the United States.
Jacobson believes that if TSMC cannot obtain a license, there are two ways to avoid the US ban: first, stop using US made equipment to produce chips designed by Huawei; second, sell chips not designed by Huawei.
TSMC's "hidden worries"
Liu Deyin, chairman of TSMC, said in a conference call in late April that TSMC is evaluating plans to build plants in the United States. The current cost gap is unacceptable, and TSMC has been making efforts to narrow the gap.
TSMC said at the first quarter performance briefing that the company bucked the trend in the first quarter of 2020, achieving a net profit of NT $119 billion (about 28.35 billion), a record high. In the first quarter, revenue reached NT $310.6 billion, up 42% year on year. Among them, the revenue of 7Nm process accounts for 35%, that of 10nm is only 0.5%, that of 16nm is 19%, and that of 16nm and more advanced processes is 55%.
Huawei contributed NT $152.876 billion (36.4 billion) in revenue to TSMC last year, an increase of more than 80% annually, accounting for 14% of TSMC's total revenue, the Taiwan media "Central News Agency" reported on April 25. Top customersAppleLast year, it contributed NT $247.213 billion in revenue, an increase of more than 10% annually, accounting for 23% of TSMC's total revenue from 22%.
As Huawei is one of the major manufacturers that first adopted TSMC's advanced process technology, if the U.S. strengthens its export control over Huawei, it will have an impact on TSMC's short-term operation. The report calls this situation TSMC's "hidden worry".
In addition, TSMC's hidden worries are not only from Huawei's direction, but also from its main customers.
In response to foreign media's query on whether China will take retaliatory measures against the United States on May 16, the Chinese foreign ministry made it clear that China would resolutely defend the legitimate rights of its enterprises and urged the United States to immediately stop "unreasonable suppression" of Chinese companies such as Huawei. The trump administration's actions "destroy the global manufacturing industry, supply chain and value chain".
The Global Times quoted a source as saying that if the US finally implemented the plan, China would fight back strongly, or involve Qualcomm, Cisco, apple, Boeing and other US companies.