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TSMC Plans $12 Billion U.S. Chip Plant in Arizona

Image:- Taiwan Semiconductor Manufacturing

A senior U.S. official said that Taiwan Semiconductor Manufacturing Co Ltd, which unveiled a $12 billion investment plan in Arizona on Friday, has no assurances that it will be granted a licence to sell U.S. technology to China's Huawei.

TSMC, the world's largest contract chipmaker, announced its plans on Friday just hours before the Trump administration outlined a proposal to amend the tech export rules which could restrict TSMC 's sales to Huawei, which is blacklisted by the United States because it is considered a national security threat.

The new rule, unveiled by the Department of Commerce and first reported by Reuters, expands U.S. authority to require licences to sell semiconductors made abroad with U.S. technology to Huawei, expanding the reach of Washington to stop exports to No. 2 smartphone manufacturers worldwide.

"There's no assurance at all about that," Keith Krach, U.S. Deputy Secretary for Economic Growth, Energy and Environment, told reporters in a call if TSMC was assured of a licence.

"I think about 10-12 per cent of TMSC 's business is China, and I think that's almost primarily Huawei in essence," Krach said. "So they're going to be restricted unless a licence is granted, and there's no assurance on that and we don't anticipate that."

TSMC earlier said it was working with external counsel to interpret the rules in a timely manner and maintain long-term collaborations with equipment partners worldwide.

Krach has urged U.S. allies and partners to join Washington in aligning its domestic export control laws to address Huawei and China's "very real security threat."

He did not spell out what the potential incentives would be for TSMC, but said that the administration will help make the investment successful for the company. "I know, in terms of incentives, that there are a number of things in the U.S. Congress watches. I think ... I think ... Some really good opportunities are coming down the road, "Krach said.

Huawei, which needs semiconductors for its smartphones and telecommunications equipment, has been at the centre of a battle between the United States and China for global technological dominance. In recent months, the relationship between the two largest economies in the world has soured over the origins of the deadly coronavirus.

Article Edited by | John Heine |

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