Tuesday, December 28, 2021

Chips: Taiwan, Japan Eye 'All Round Cooperation'

Three from Reuters. First up, via MSN, December 20:

Taiwan govt OKs Taiwan Semiconductor's new chip plant in Japan

And via US News & World Report, December 24, the headline story:

Taiwan and Japan's ruling parties agreed on Friday to have "all round cooperation" on semiconductors and to hold regular talks, Taiwanese lawmakers said, after what are de facto discussions between the two governments.

Although Chinese-claimed Taiwan and Japan do not have formal diplomatic ties, they have close unofficial relations and both share concerns about China, especially its increased military activities near the two.

The talks, attended by two senior lawmakers each from Taiwan's Democratic Progressive Party (DPP) and Japan's Liberal Democratic Party (LDP), took place online, and follow initial consultations in late August.

DPP lawmaker Chiu Chih-wei told reporters that chips were not just an issue for Japanese industry, which like the rest of the world has faced semiconductor shortages, but also an issue of security in the face of China.

"Both sides agreed that in the future there will be even more cooperation on chip supply chains, there will be a complete framework, a system, to have all round cooperation on semiconductors and other industries the two countries put importance on," he said.

Japanese officials said they had agreed with the Taiwan side that both they as well as the United States needed to cooperate to build resilient supply chains in areas such as semiconductors.

"We need to do our utmost in tackling the shortage of semiconductors at the moment, but realms of cooperation should expand as we go forward," Akimasa Ishikawa, a Liberal Democratic Party lawmaker who participated in the meeting, told reporters. "One of the major challenges will be how the three countries join hands in response to China's high-tech investments."

Taiwan Semiconductor Manufacturing Co Ltd said last month it would build a $7 billion chip plant in Japan with Sony Group. TSMC, a major Apple supplier, produces some of the world's most advanced semiconductors.....


Finally, a Reuters deep dive via Nasdaq, December 27:  

SPECIAL REPORT-Taiwan chip industry emerges as battlefront in U.S.-China showdown
On the front line of the superpower struggle between the United States and China, Taiwan has fashioned a defensive masterstroke. It has become indispensable to both sides.

In dominating the fabrication of the most advanced semiconductors, the giant Taiwan Semiconductor Manufacturing Company Ltd (TSMC) 2330.TW has captured a technology that's crucial to the cutting-edge digital devices and weapons of today and tomorrow. TSMC accounts for more than 90% of global output of these chips, according to industry estimates.

Both superpowers now find themselves deeply dependent on the small island at the center of their increasingly tense rivalry.

For Washington, allowing an increasingly powerful China to overrun TSMC's foundries in a conflict would threaten U.S. military and technological leadership. However, if Beijing invades, there is no guarantee it could seize the prized foundries intact. They could easily become a casualty of the fighting, severing the supply of chips to China's vast electronics industry. Even if the foundries survived a Chinese takeover, they would almost certainly be cut off from a global supply chain essential to their output.

Both America and China want to break their dependency. Washington has persuaded TSMC to open a U.S. foundry that will make advanced semiconductors and is preparing to spend billions rebuilding its domestic chip-making industry. Beijing, too, is spending big, but its chip industry lags a decade or so behind Taiwan's in many key areas. Analysts say that gap is expected to widen in the years ahead.

So valuable are these foundries to the global economy that some here refer to Taiwan's chip sector as a "silicon shield" that deters a Chinese attack and ensures American support....


Some previous attempts at explaining how important these actions are:

January 16, 2020
As Concern Grows Over China’s Invasion Threat To Taiwan the U.S. Military Wants TSMC To Move Some Chip Capacity
And some thought I'd gone mad talking of chips and China and the island formerly known as Formosa (at least to the Portuguese).
p.s. can I start attending the Thursday soirées again? Please....

July 3 2019's "China to Narrow Chip Gap With Taiwan Invasion"

Did I say invade? I meant trade.
I must have been thinking of China's Defense Minister last month saying "China must be and will be reunited".
With the Taiwanese elections coming up it's probably as good a time as any for Beijing to make some sort of move. Probably not invasion though. China will want to test its military somewhere, our guess is Vietnam, before tackling Taiwan. So probably some sort of fifth column action, cyber, electrical grid etc. And the people to do it are already on the island, I mean if the Chinese could get one of their spies into Dianne Feinstein's office while she was Chair of the Senate Intelligence Committee (2009 - 2015), the guy was her San Francisco office manager, not, as reported, the chauffeur, if they could do that there is no doubt they have assets in Teipei.
So where was I?

Chips. For all their technological wizardry the Chinese are still having trouble making chips. Some of our links on that after the jump....
And August 28, 2019
Chips: How China Is Still Paying the Price For Squandering Its Chance To Build a Home-grown Semiconductor Industry 
Should China ever invade Taiwan the TSMC fabs would be quite a prize.
We've looked at this oddity a few times, some links below....
Intel is known in some circles as Chipzilla but, truth be told, the appellation might more accurately belong to TSMC.
And some focused more on Chinese chips:
If interested see also April 2021's : 

You can see Japan's quandary if you follow the islands down to Okinawa and beyond:


Asia Pacific Journal Japan Focus (more after the jump)