US-China tech war: state media questions Washington’s intent on demanding chip supply data from TSMC, Samsung amid ‘targeted sanction’ concerns

The US government’s recent request for chip supply data ‘exposes its plot’ to hold back China’s semiconductor development, according to Xinhua
While no mainland Chinese firms were targeted by the US survey, it set off alarm bells in the country’s semiconductor industry

Semiconductors

Xinmei Shenin Hong KongandChe Panin Beijing

Published: 9:00pm, 26 Nov 2021

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China’s official state media has accused the US government of hatching a plot to obtain more information about the country’s semiconductor industry and hold back its development, following Washington’s recent request for chip supply data from companies that include Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics.

“The US’ move to forcefully demand global semiconductor core data once again exposes its plot to forge a US-dominated global semiconductor supply chain, and to use chips to restrain China,” Xinhua News Agency wrote in an article published on Thursday.

The article intensifies Chinese state media’s denunciation of the US Commerce Department’s request for information, announced in September, which asked US and foreign companies in the semiconductor industry to submit supply chain data as part of efforts to help resolve bottlenecks. This US survey, which had a November 8 deadline, includes applied technology, product types, inventory data, order backlogs, delivery time and information on each product’s top three customers.

“The US requested data includes a lot of information about orders from Chinese companies, and the production capacity of Japanese and Korean businesses in China,” Xinhua said. “The plot by the US to get its hands on critical information of China’s semiconductor industry has been exposed. And it can’t be excluded that the US will use the core commerce data … to build a ‘China-excluded’ semiconductor supply chain.”

Taiwan Semiconductor Manufacturing Co’s recent decision to comply with a US government request for chip supply data has drawn criticism from Chinese state media. Photo: Shutterstock

While no mainland Chinese companies were targeted by the US survey, Washington’s request for data set off alarm bells within the domestic semiconductor sector, which has faced mounting restrictions from US sanctions that curtail access to advanced chip technologies and equipment.

Despite Xinhua’s accusation, the US government did not cite China as the reason for its chip data survey even though tensions have increased between the two sides over trade issues and competition in advanced technologies.

Neither China’s Ministry of Foreign Affairs nor the Ministry of Commerce has made an official comment about the US request and the companies that have responded to the survey.

But that has not stopped various Chinese government-backed publications from railing against the recent decision by TSMC, the world’s largest contract chip manufacturer, to comply with the US data request. Beijing’s Taiwan Affairs Office had earlier blamed the island’s government for failing to protect local companies from Washington’s pressure.

China’s Communist Party casts a wide net for ‘technology security’

TSMC, which plans to expand its chip fabrication facility in the eastern city of Nanjing, assured in October that it would “respond to the request without providing customers’ confidential information”.

In a commentary published on Chinese media Guancha.cn on November 9, a day after the US survey’s deadline for submissions, Beijing-based tech analyst Xiang Ligang indicated that the information gathered could help the US “accurately strike” Chinese companies that may order advanced chips from manufacturers overseas.

Despite his earlier warning of potential targeted sanctions, Xiang on Friday said the US will not know the details about the progress of China’s domestic semiconductor companies.

Semiconductor bottlenecks push Chinese chip production lower in October

Xinhua’s latest broadside against the US government came a day after Washington added a dozen more Chinese firms to its trade blacklist, which restricts American enterprises from selling products to these companies on national security grounds.

The additions to the US Commerce Department’s entity list include semiconductor firms, quantum computing companies and Chinese businesses that have contributed to nuclear activities in Pakistan.