TSMC Cuts China's Access to Advanced Chips || Peter Zeihan
Nov 22, 2024
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Discover the latest developments in the semiconductor industry as a major player cuts advanced chip orders from Chinese companies. The discussion highlights the geopolitical tensions influencing tech policies across US administrations. Dive into the intriguing differences between DUV and EUV lithography technologies, and understand their implications for global semiconductor access. The implications of these changes resonate far beyond the tech world, impacting international relations and technological dominance.
TSMC's decision to restrict chip orders from China highlights ongoing challenges in enforcing US sanctions on advanced technology transfer.
The contrasting strategies of the Trump and Biden administrations illustrate different approaches to managing technological competition with China.
Deep dives
TSMC's Order Ban and Its Implications
The Taiwanese semiconductor company TSMC has announced it will no longer accept orders for chips that are seven nanometers or smaller from any Chinese entity, effectively tightening restrictions on high-end semiconductor sales to China. This decision was prompted by the discovery of TSMC chips in a Huawei product, raising concerns that current sanctions were not adequately preventing technology transfers. Within 48 hours of TSMC's announcement, the Biden administration expressed its intent to support the enforcement of this ban, indicating a collaborative strategy focusing on preventing Chinese access to advanced technology. The contrasting approaches of the Trump and Biden administrations towards China, with Trump emphasizing tariffs and Biden favoring a targeted, bureaucratic approach, highlight differing philosophies on managing foreign policy and technological competition.
Technological Barriers and Semiconductor Manufacturing
The discussion details the technological distinction between deep ultraviolet (DUV) and extreme ultraviolet (EUV) lithography methods in semiconductor manufacturing, emphasizing the importance of these technologies in producing high-quality chips. EUV allows for more precise etching at the atomic level, thereby achieving greater efficiency and improved performance in chip production with fewer errors compared to DUV, which is less advanced and more reliant on manual engineering processes. Despite recent advancements, Chinese manufacturers struggle to replicate EUV technology due to their inability to produce the necessary machines, which are exclusively made by the Dutch company ASML. As a result, China’s access to high-performance semiconductor technology faces significant hurdles, limiting its potential for innovation in competitive fields like artificial intelligence and electric vehicles.
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TSMC's Strategic Withdrawal from Chinese Semiconductor Orders