U.S. to brief Taiwanese firms about chip export controls in March

Taipei, Feb. 3 (CNA) U.S. officials will brief Taiwanese semiconductor suppliers on new export controls in March, Taiwan's Industrial Development Administration (IDA) said Saturday.

The IDA, part of the Ministry of Economic Affairs, told CNA that the briefings will be organized by the American Institute in Taiwan (AIT), Washington's de facto embassy in Taiwan.

Representatives from Taiwanese semiconductor suppliers stationed in the country's science-based parks, including the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), have been invited to the briefings, the IDA added.

The upcoming briefings will be followed by a Q&A session to help suppliers understand the rules and avoid being sanctioned, the IDA said.

To prevent China from acquiring advanced chip production technologies and equipment, Washington has tightened export controls since October 2023 and threatened to punish noncompliance with restrictions on logistics and fund flows.

According to the IDA, the U.S. has added a ban on selling chips with a computational performance density exceeding 4,800 Tera Operations Per Second (TOPS) to China.

In addition, Chinese producers of 4,800 TOPS chips are banned from acquiring pure-play foundry services that apply to U.S. production technologies, the IDA said.

In October 2023, the AIT organized similar briefings in Taiwan with two senior officials from the CHIPS Program Office (CPO), one of two offices administering the US$39 billion budget from the CHIPS Act.

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, officially signed into law by U.S. President Joe Biden in 2022, was aimed at getting semiconductor manufacturers to invest in America and making it less dependent on overseas chip suppliers, including those in Taiwan.

The legislation provided US$52.7 billion for American semiconductor research, development, manufacturing and workforce development, including US$39 billion in manufacturing incentives.

Since the law came out, however, there has been some confusion on what types of companies would be eligible for subsidies under the act, including whether suppliers of semiconductor materials would qualify.

Meanwhile, with China intensifying efforts to strengthen its semiconductor industry, the IDA has assigned about NT$2.2 billion (US$70.51 million) to help local IC designers and semiconductor raw material and equipment suppliers strengthen their processes.

The NT$2.2 billion is part of the government's 10-year US$300 billion Chip-based Industrial Innovation Program initiated by the National Science and Technology Council (NSTC) to help Taiwanese IC designers secure a higher share in the global market, the IDA said.

According to the IDA, there are more than 200 IC designers in Taiwan, including many small-sized ones or start-ups that need financial assistance to grow, and the NT$2.2 billion funds aim to help local IC designers develop the 16-nanometer process and more advanced technologies to meet growing demand from artificial intelligence development, high-performance computing (HPC) and automotive electronics.

The IDA said IC suppliers interested in the funding should submit their applications by March 29.

In 2023, Taiwan's IC designers owned a 39 percent share in the global high-end processes, the MOEA said, forecasting the share will grow to 43 percent in 2024 on the back of the government's support.

As for semiconductor raw materials and equipment, the IDA said their technologies have extended to advanced 2.5D-3D applications from 2D, and the new technologies have become a trend in the IC packaging and testing service industry.