TSMC CEO warns of weakening trust after U.S. blacklists Chinese firms

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Taiwan Semiconductor Manufacturing Co. CEO CC Wei warned of the dangers of excessive government export controls, which could erode mutual trust between countries.

“Export restrictions and other bans on foreign products destroy the productivity and efficiency gained under globalization, or at least they reduce the benefits provided by the free market,” Wei said at an industry event in Taipei on Saturday. “But the scary thing is that mutual trust and cooperation between countries is starting to weaken,” he added, adding that a distorted market leads to higher costs, as he urged politicians to come up with an alternative solution.

The US blacklisted several Chinese companies and escalated trade tensions earlier this week. It is included Dozens of Chinese tech companies are on its corporate roster, making it nearly impossible to buy critical foreign components and fueling a trade war between the world’s two largest economies.

Washington’s move follows the Biden administration’s imposition of tougher export restrictions two months ago China is barred from buying or manufacturing leading-edge semiconductors – The Asian country is key to leapfrogging the US in fields like artificial intelligence and supercomputing. Key US allies including the Netherlands and JapanBloomberg News reports that they plan to follow at least some of the new U.S. rules reported.

Multilateral export controls will create a lot of challenges for China’s chip industry, Wei said.

TSMC is now building plants in Arizona and Japan amid growing concerns from customers and key governments that the world’s chip production is becoming too centralized in Taiwan.

Wei said that TSMC is developing new fabs to meet customer demand rather than to fulfill requests from foreign governments.

He said the Taiwanese chipmaker aimed to help build a plant in Japan’s Kumamoto prefecture. Sony Group Corp. provides enough chips for DSMC’s biggest customer Apple Inc

Wei also said that because TSMC’s success has been built over 30 years with the help of its suppliers, it will not be easy to copy Taiwan’s chip industry in another country.

“Globalization is almost dead. Free trade is almost dead,” TSMC founder Morris Chang said in a speech last week at the opening of a plant in Arizona. “I don’t think they’ll be back for a while.”

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