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Last week, the US announced some hard and fast restrictions on tech exports to China. It limited exports of some types of advanced computing chips and also made it more difficult to sell semiconductor equipment to any Chinese company. The US is trying to stop China from developing tech that it sees as a threat. But, with the semiconductor industry being so specialized, this move could risk interrupting the entire supply chain.
Because of these new restrictions, TSMC just cut its spending target for this year by about 10%. But, the company is trying to calm down worries about the effect the chip export curbs may have. On Thursday, Nikkei Asia reported that TSMC got a one-year extension to order American chipmaking equipment for its Chinese expansion, and it can still ship equipment to a manufacturer in Nanjing, China, according to people familiar with the matter. The company is also reportedly sending a team to Germany to look into potentially building a European factory. So, it looks like TSMC could be prepping for some major shifts in how it does business.
“The company’s 10% cut in full-year capital spending target implies prolonged weakness in smartphone and PC chip demand,” said Bloomberg Intelligence analyst Charles Shum.
“Our discussions with the Department of Commerce led to an approval to supply equipment and items needed for development and production of DRAM semiconductors in Chinese facilities without additional licensing requirements," Korean semiconductor company SK Hynix said in a statement.
“[It’s] too early to provide a specific number, however the inventory correction will likely see its biggest impact sometime in the first half of 2023,” TSMC CEO C. C. Wei told analysts.