Taiwan Newspaper Editorial: TSMC must be on guard when interacting with US companies

On December 15, Taiwan's Economic Daily published an editorial titled "The Competitive Relationship between Intel and Taiwanese Companies". The editorial said that as "legal battles" have become a means of international competition for large American companies, interactions with large American companies should be highly vigilant. The full text is excerpted as follows:

Pat Gelsinger, CEO of Intel, one of TSMC's main competitors, came to Taiwan on a private jet this week in "economic bubble" mode. He was reportedly holding talks with TSMC executives. It is believed that they will discuss cooperation plans using TSMC's most advanced 3nm process.

This is actually a good thing, because Gelsinger has repeatedly stated that he wants to produce advanced chips in Taiwan, and he will come to Taiwan to negotiate in person, which means that this business opportunity may be transferred to TSMC. However, in view of Gelsinger's recent remarks and the past experience of a few key Taiwanese companies paying a heavy price for not being familiar with regulations and precedents when interacting with international companies, we must also remind TSMC's top management to be cautious and careful in their response. TSMC not only belongs to its shareholders, but is also an important asset of Taiwanese society, and must not be taken lightly.

Intel has always been a super company in the chip field, but in recent years, it has lagged behind TSMC and Samsung in the development of high-performance chips, and has been left behind by Taiwan and South Korea. Now it is difficult to return to the production of high-performance chips. Therefore, TSMC must understand what strategy the new CEO will adopt. As the saying goes, "Don't have the intention to harm others, but be on guard against others", TSMC's senior management must keep it in mind.

The reason why we have such concerns is that in 2006, several famous panel manufacturers in Taiwan were involved in a tragedy when HP and Dell in the United States sued AUO, Samsung, AUO, and Chi Mei Optoelectronics for jointly monopolizing panel prices. Samsung was able to escape prosecution because the U.S. Department of Justice broke through its defenses and turned into a tainted witness and provided meeting records. Other panel manufacturers pleaded guilty and paid huge fines. Senior executives of Chi Mei Optoelectronics, AUO, and AUO went to the United States to serve their sentences. This was one of the most painful experiences in Taiwan's manufacturing industry, and everyone should still remember it.

A senior executive of the company being sued later pointed out: "It was just a handshake and chat between old friends. There was no contract signed and no implementation. It was even just a strategy to deceive the enemy. But this is not acceptable. It is considered illegal by the Americans..." We cannot know the truth, but if the above statement is true, we can imagine that in the face of such a strict judicial ruling in the United States, any gathering between leading companies should be extremely cautious? They must even clarify the scope of the meeting before the meeting, and keep meeting records as evidence in the future when they may need to protect themselves?

Two years ago, the Chinese translation of the book "The American Trap" was published in Taiwan. The book describes how the US judicial department used US laws and "long-arm jurisdiction" to deal with Alstom, a core French energy company. The US first arrested the head of the group directly at the airport, then convicted the company of corruption and bribery, and fined it a huge sum of money, taking the opportunity to have General Electric of the United States acquire the group's most profitable power department. Under the situation that "legal battles" have become a means of international competition for large American companies, interactions with large American companies should be highly vigilant. If you win the technology war but lose the legal war, that would be a matter of great regret.