TSMC just can't help it! Submitting data to the United States, triggering deep thinking about the development of local chips
TSMC US data chip
On October 22, TSMC stated that it would submit relevant information to the United States before the deadline of November 8. For a time, the industry was in an uproar, especially TSMC customers, who worried that their core product secrets would be leaked.
The U.S. formally requested data from all walks of life began on September 24, Eastern Time. On the same day, the Bureau of Industrial Security and the Office of Technology Assessment of the U.S. Department of Commerce issued a notice of "Semiconductor Supply Chain Risk Public Comment", expressing that it is to promote the supply chain. Link information circulation, solicit relevant data and information from interested companies in the semiconductor supply chain. This information is collected as of November 8.
Although the US Department of Commerce claims that the data provided by the companies in the plan is voluntary, the data will not be disclosed or made public. But then he said that it will depend on the quality of the data submitted by each company to decide whether to take mandatory measures to obtain the necessary data to help clarify the semiconductor shortage.
Foundry is the key link
Why did the US government do this? The answer is given in the blog of the White House official website. It was mentioned in the blog post that “the shortage of semiconductor chips has proven to be more difficult to solve and drag the US economy. Some analysts estimate that the shortage of chips may reduce the US GDP growth this year by nearly one percentage point and cause a wave of production shutdowns, hurting. Hundreds of thousands of U.S. manufacturing workers in the automotive and heavy-duty truck industry."

Source: White House official website
Why is the government taking the lead in doing this? The blog post explained that the ability of a single company to adjust quickly in the face of shocks may be limited by the dynamics of the industry chain, including the lack of communication and trust between manufacturers in the supply chain. The government has a unique ability to solve coordination challenges and act as a trusted source of data. This role is especially important in times of shortage, in order to deal with downstream companies’ over-ordering or stockpiling, and upstream companies’ inability to complete orders due to lack of trust, which will lead to shortages, delays, and prices for workers, households and small businesses that ultimately rely on these commodities. Rise and uncertainty.
In fact, boiled down to the text in this blog post, the US government has to figure out two things: first, how many chips the semiconductor chip industry has made; second, to whom are the chip manufacturers selling the chips after they get them.
According to different industries, the types of chip manufacturers will be different. For example, the automotive industry will find Infineon, NXP and Renesas; the PC industry will inquire Intel, AMD, Micron, etc.
And to know how many chips the industry has made? The most important thing is to get data from TSMC, Samsung, GF, and UMC. According to statistics in the second quarter of this year, the total share of these four foundries reached 85%. In particular, according to TSMC’s data, its foundry share ranks first in the industry, exceeding 50%. The global fabless IC design companies basically rely on TSMC, Samsung, GF, these foundry products, including Qualcomm, Broadcom, MediaTek and other industry giants. Due to the high concentration of the foundry industry, customer data has also become a kind of competitiveness, and its importance is no less than that of the research and development of advanced processes.

Data source: TrendForce (electronic enthusiast graphics)
According to the questionnaire published on the official website of the US government, the 25 questions involved process nodes, customer conditions, inventory, orders and actual shipments, capacity and yield, etc.
Therefore, it is inevitable that TSMC’s customers will be worried. Once TSMC submits the data, their orders with TSMC are equivalent to unilateral disclosure to the U.S. government. Although the U.S. government has made it clear that it will not disclose and announce to the outside world, the depth of the data is in everyone’s mind. Basically nothing. In addition, the US government recently further stated that it will determine whether any companies want to prevaricate based on the quality of the submitted data.
TSMC previously stated that customer trust is one of the elements of TSMC’s success, and TSMC will never disclose sensitive information such as customer data. After this round of statements, Fang Shuhua, deputy general manager and chief legal officer of TSMC, reiterated in an interview with the media, “Customers are one of the elements of TSMC’s success. TSMC will not leak sensitive information, especially confidential customer information. Shareholders and customers are advised not to Worry."
Will TSMC really be next?
According to current foreign media reports, many companies have chosen to submit data, including Intel, General Motors, Infineon, and SK Hynix. Counting TSMC now, there is still one of the top manufacturers that has not compromised, that is, Samsung.
Although Samsung's foundry share is not as large as TSMC, it ranks second in the global foundry market and still occupies 18.8% of the industry's market share according to statistics in the second quarter of this year. Samsung Electronics is also the world's largest storage manufacturer, and its storage products are in a leading position in all fields. For example, in the mobile phone storage market, according to the statistics of the market research organization Strategy Analytics, in the first quarter of 2021, in the smartphone memory chip market, Samsung Storage ranked first with 49% market share (DRAM and NAND).

Source: Strategy Analytics
For Samsung, the submission of data first means that its foundry business will be impacted. At the critical moment when the company and TSMC win 3nm and 2nm, data such as yield and production capacity are absolutely confidential, and they are also a game with customers. means. Secondly, once the data is handed in, Samsung's many advantages in the storage market will also be dismantled, especially Samsung's influence on the price of storage products.
At present, South Korean semiconductor practitioners are calling on the government to come forward to support Samsung, so that the company can pass this barrier. South Korean Ambassador to the United States Lee Soo Hyuk said on October 13 that companies will not easily provide highly confidential information.
We don’t care whether Samsung can finally persist in the end, but the United States still knows the importance of data to foundries. Its motive and purpose seem to be more than just to relieve the crisis of industry shortages.
Recently, an article published by the WeChat public account "Ning Nanshan" triggered widespread discussion in the industry. The article titled "Ning Nanshan: I always feel that the next goal of the United States is TSMC." The article mentioned: "Recently, I have two thoughts about the semiconductor industry. The first one, I don't know why. I always feel that after Toshiba of Japan, Alstom of France, and Huawei, the next one may be TSMC. I have seen it before. A number of strategic analysis reports conducted by the United States all mentioned that most of the world’s semiconductor foundry production capacity is located in mainland China and Taiwan, which is only more than 100 kilometers away from mainland China. Especially the advanced production capacity has a higher concentration. A major hidden danger to U.S. national security."
The book "American Trap" records how the United States dismembered Alstom. As a global leader in rail transit, power equipment, and power transmission infrastructure, Alstom has more than 100,000 employees in its heyday, has operations in more than 70 countries and regions around the world, and has a number of “world’s No. 1” companies in the energy sector. one".
The "Ning Nanshan" public account started with Alstom and Huawei, which made people have to worry about TSMC, the foundry giant, even though TSMC had previously announced that it would spend a huge amount of US$12 billion to build a factory in the United States.
How to do things with mature technology?
Let's dig deeper into the problem, whether it is the US government using the tools in the "toolbox" to get the data of TSMC and Samsung, or the US government has done the same to deal with TSMC again. For the development of local chips, a "high probability" result is that if you want to use advanced technology, you have to bear the risks more or less. For example, it was paid attention to from the customer orders of the fab, and then it was included in the list of entities in the United States.
Once companies are unwilling to take these risks, they can only pin their hopes on local foundries. And now we all know that the local foundry leader SMIC is also under export control by the US government, and the EUV lithography machine necessary for the development of advanced processes cannot be purchased.
In the future, the most "reliable" process that a local chip design company can use may be SMIC's 14nm. In other words, most chip products need to be based on mature technology. How to make a breakthrough through such a process? This may force local chips to make breakthroughs in advanced packaging and optoelectronic chips.