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Espionage and tariffs can't tarnish TSMC's crown
Espionage and tariffs can't tarnish TSMC's crown

Japan Times

time5 days ago

  • Business
  • Japan Times

Espionage and tariffs can't tarnish TSMC's crown

An attempt to steal trade secrets from the world's largest chipmaker and renewed tariff threats on semiconductors is bending Taiwan's "silicon shield.' But it's not breaking just yet. Still, heavy is the head of Taiwan Semiconductor Manufacturing Co., whose technology everybody wants a piece of. Less than a day after news broke that TSMC fired several employees for a suspected attempt to obtain critical information on its cutting-edge manufacturing, U.S. President Donald Trump threatened new chip tariffs "of approximately 100%.' On Thursday, Taiwan confirmed that TSMC is exempt from the latest levies due to its investments in the U.S. But the president still sowed a lot of confusion after stating in a recent interview that Taiwan was "coming over and spending $300 billion in Arizona, building the biggest plant in the world.' TSMC had previously only committed $165 billion, suggesting negotiations might not be over. Trump likely realized that new, sky-high tariffs on TSMC would be a blow to U.S. tech ambitions. Domestic titans at the heart of maintaining America's lead over China, such as Nvidia and Apple, are TSMC's biggest customers. And fresh levies would be an own-goal for the Stargate artificial intelligence infrastructure plans Trump announced earlier this year, which rely on hundreds of thousands of advanced chips. The news of a tariff reprieve helped drive TSMC's shares to a record on Thursday. TSMC's multibillion-dollar expansion efforts in the U.S. haven't always gone over well at home. Some patriotic Taiwanese want the chipmaker to keep core technologies within the self-ruled island as a safeguard from potential Beijing aggression. But expanding manufacturing to the U.S. will only strengthen Taiwan's alliance with Washington and give its footprint room to grow. It's also worth recognizing that TSMC and Silicon valley are on the same side when it comes to countering China. Still, tariffs may not be the company's biggest headache. The potential corporate espionage is far more than a run-of-the-mill commercial intellectual property theft. It's being investigated under Taiwan's national security law and has the potential to spiral into a broader geopolitical spat. At this stage, here are more questions than answers. The scope of the leak, the perpetrator and the motive haven't been disclosed. Still, TSMC has said it was able to identify the issue "early.' On Thursday, Tokyo Electron confirmed that a former employee was involved in the case, though said an internal probe hadn't found evidence of the confidential information being shared with a third party. Local prosecutors have made half a dozen arrests and the people involved were reportedly targeting information on the company's 2-nanometer production — the most advanced chip manufacturing technology in the world. Besides TSMC, there are only three other companies that are actively trying to mass produce the cutting-edge chips: Samsung Electronics, Intel and Japan's long-shot startup Rapidus. Many of them rely on the same suppliers, such as Tokyo Electron. Acquiring the critical know-how for smaller chip node production can cost tens of billions of dollars in research and development. There are other reasons so few firms are capable of attempting this. Even with the R&D knowledge, it still requires massive investments in fabrication plants and tooling equipment, as well as access to a very limited supply of trained engineers to compete at scale. Taiwan and TSMC have spent decades building this foundation and there aren't clear shortcuts to leapfrog the company's dominance — even unethical ones. Countries and companies have poured billions trying to eclipse TSMC's virtual monopoly on advanced chipmaking, but these hard-won gains can't be spread (or stolen) overnight. The firm is also no stranger to talent poaching and other attempts at IP theft; it's a systemic issue in an industry where the strategic importance is so high. The most recent case is spurring international "whodunnit" intrigue, but more importantly it shows that the company has beefed up internal security protocols to rapidly respond. It can't be overstated how important it is for TSMC to maintain its technology edge. Some 24% of the most-recent quarterly revenue came from its 3-nanometer tech. Demand is already high for the company's next-generation nodes, set to go into mass production later this year. TSMC's dominance gives it the power to set prices at a time when the foreign exchange rate is unfavorable and trade uncertainty looms. This tech advantage has not just proven crucial for TSMC's business. It is giving Taiwan's government leverage via so-called semiconductor diplomacy. The potential leak gives new fuel to critics of President Lai Ching-te, who has had a rough few weeks. As the first chips-related case involving the National Security Act, it's imperative that authorities investigate and respond to the fullest extent of the law. Taipei must set a precedent with this case to deter any future attempts. As my colleague Howard Chua-Eoan has written, history shows us that technological secrets and monopolies have a hard time staying that way in the long run. For now, TSMC is selling the shovels during a global AI gold rush. Even tariff threats and espionage attempts can't tarnish it's crown just yet. Catherine Thorbecke is a Bloomberg Opinion columnist covering Asia tech.

TSMC Hits Record; Taiwan Says Tech Giant Exempt From US Tariffs
TSMC Hits Record; Taiwan Says Tech Giant Exempt From US Tariffs

Yahoo

time07-08-2025

  • Business
  • Yahoo

TSMC Hits Record; Taiwan Says Tech Giant Exempt From US Tariffs

(Bloomberg) -- Taiwan said its leading chip manufacturer will not have to pay a 100% tariff on sales to the US, helping drive Taiwan Semiconductor Manufacturing Co. shares to a record. All Hail the Humble Speed Hump Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Major Istanbul Projects Are Stalling as City Leaders Sit in Jail PATH Train Service Resumes After Fire at Jersey City Station 'TSMC is exempted from the chip tariffs because it has set up plants in the US,' Liu Chin-ching, minister in charge of the National Development Council, said in Taipei on Thursday. As for other Taiwanese companies that may be affected by the levies, they 'shall continue to stay ahead' if competitors face the same charges. The US government has also expressed willingness to continue negotiations with Taiwan on tariff issues, Liu added. The government still expects economic growth in 2025 to reach the level of 3.1%, despite the impact of the new levies, Liu said. TSMC manufactures the most advanced chips used in artificial intelligence, and the island's technology exports drove growth to a blistering 7.96% in the second quarter, the fastest pace in four years. The trillion-dollar company accounts for almost 40% of the weight of Taiwan's benchmark stock index, and its rally Thursday helped lift the broader benchmark. TSMC's shares rose 4.89% to a record NT$1,180 Thursday, helping the island's benchmark stock index outperform regional peers with a 2.4% gain. The Taiwan dollar also rallied as much as 0.9% against the greenback. United Microelectronics Corp., Taiwan's second-largest chipmaker, may also reduce the impact of tariffs through its cooperation with Intel Corp., Liu said. 'Investors had been apprehensive while awaiting the tariff rate for semiconductors, but exemptions for Taiwan's largest company have allayed concerns,' said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group. 'Foreign equity inflows on the back of this news have helped pushed TWD stronger. With the dividend repatriation flows now largely complete, and with the USD back under pressure again, we could see further appreciation in TWD near-term.' On Wednesday, Trump said he would impose a 100% tariff on semiconductor imports, but cited Apple Inc. as an example of a company that won't have to pay levies because of its investment in the US. 'If you're building in the United States of America, there's no charge,' Trump said. 'Even though you're building and you're not producing yet.' In March, TSMC announced an additional $100 billion investment in the US, with three more fabs, two advanced packaging facilities and a research and development center in Arizona, raising its total investment in the US to $165 billion. The US recently imposed a 20% tariff on goods from Taiwan, but said the chip sector would be treated separately. That levy is higher than the 15% Taiwan's main regional competitors like Japan and South Korea both secured. Still, companies and governments continue to scramble to assess the impact of Trump's various tariff announcements. South Korea's Samsung Electronics Co. has chip fabs in Texas and is joining Apple's 'American Manufacturing Program,' making it well-positioned to avoid tariffs. But the government of Malaysia, a significant semiconductor exporter, on Thursday said it has reached out to the US seeking clarity on the tariffs. Malaysia's chip industry is unlikely to be severely impacted, the Star separately reported, citing Prime Minister Anwar Ibrahim. Most of the companies in Malaysia's chip industry are US-based or have committed to continue their investments and production in the world's largest economy. --With assistance from Betty Hou, Wenjin Lv, Anisah Shukry and Netty Ismail. (Updates with TSMC's share price and Taiwan dollar's gain in the fifth paragraph. Adds Malaysian report.) Russia's Secret War and the Plot to Kill a German CEO The Pizza Oven Startup With a Plan to Own Every Piece of the Pie AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay Government Steps Up Campaign Against Business School Diversity A High-Rise Push Is Helping Mumbai Squeeze in Pools, Gyms and Greenery ©2025 Bloomberg L.P.

TSMC Shares Surge as Taiwan Says Firm Exempt From Trump Tariffs
TSMC Shares Surge as Taiwan Says Firm Exempt From Trump Tariffs

Yahoo

time07-08-2025

  • Business
  • Yahoo

TSMC Shares Surge as Taiwan Says Firm Exempt From Trump Tariffs

(Bloomberg) -- Taiwan said its leading chip manufacturer will not have to pay a 100% tariff on such imports to the US, helping drive Taiwan Semiconductor Manufacturing Co. shares to a record. All Hail the Humble Speed Hump Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Major Istanbul Projects Are Stalling as City Leaders Sit in Jail PATH Train Service Resumes After Fire at Jersey City Station 'TSMC is exempted from the chip tariffs because it has set up plants in the US,' Liu Chin-ching, minister in charge of the National Development Council, said in Taipei on Thursday. As for other Taiwanese companies that may be affected by the levies, they 'shall continue to stay ahead' if competitors face the same charges. The US government has also expressed willingness to continue negotiations with Taiwan on tariff issues, Liu added. The government still expects economic growth in 2025 to reach the level of 3.1%, despite the impact of the new levies, Liu said. TSMC manufactures the most advanced chips used in artificial intelligence, and the island's technology exports drove growth to a blistering 7.96% in the second quarter, the fastest pace in four years. The trillion-dollar company accounts for almost 40% of the weight of Taiwan's benchmark stock index, and its rally Thursday helped lift the broader benchmark. The Taiwan dollar also gained as much as 0.6% to 29.808, the strongest level in a week, after the government confirmed TSMC is exempted from the US chip tariffs. United Microelectronics Corp., Taiwan's second-largest chipmaker, may also reduce the impact of tariffs through its cooperation with Intel Corp., Liu said. 'Investors had been apprehensive while awaiting the tariff rate for semiconductors, but exemptions for Taiwan's largest company have allayed concerns,' said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group. 'Foreign equity inflows on the back of this news have helped pushed TWD stronger. With the dividend repatriation flows now largely complete, and with the USD back under pressure again, we could see further appreciation in TWD near-term.' On Wednesday, Trump said he would impose a 100% tariff on semiconductor imports, but cited Apple Inc. as an example of a company that won't have to pay levies because of its investment in the US. 'If you're building in the United States of America, there's no charge,' Trump said. 'Even though you're building and you're not producing yet.' In March, TSMC announced an additional $100 billion investment in the US, with three more fabs, two advanced packaging facilities and a research and development center in Arizona, raising its total investment in the US to $165 billion. The US recently imposed a 20% tariff on goods from Taiwan, but said the chip sector would be treated separately. That levy is higher than the 15% Taiwan's main regional competitors like Japan and South Korea both secured. Still, companies and governments continue to scramble to assess the impact of Trump's various tariff announcements. South Korea's Samsung Electronics Co. has chip fabs in Texas and is joining Apple's 'American Manufacturing Program,' making it well-positioned to avoid tariffs. But the government of Malaysia, a significant semiconductor exporter, on Thursday said it has reached out to the US seeking clarity on the tariffs. --With assistance from Betty Hou, Wenjin Lv and Anisah Shukry. Russia's Secret War and the Plot to Kill a German CEO The Pizza Oven Startup With a Plan to Own Every Piece of the Pie AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay Government Steps Up Campaign Against Business School Diversity A High-Rise Push Is Helping Mumbai Squeeze in Pools, Gyms and Greenery ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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