Taiwan media: The US-China technology cold war benefits Taiwan's semiconductor industry in three ways

Jiwei.com reports that with the spread of the global COVID-19 pandemic, the Sino-US technological cold war and the United States' "extreme pressure" on Huawei, Taiwan's "Economic Daily" recently published an article pointing out that since the second half of 2019, mainland brand manufacturers and semiconductor manufacturers have cooperated with localization and de-Americanization goals to set off a wave of self-developed chips. American brand manufacturers such as Apple pursue product differentiation and have also begun to embark on the road of self-developed chips. The two major demand momentums have brought good prospects for Taiwan's IP, ASIC, design service and other manufacturers.

The article points out that the United States implemented bans on Huawei and other countries in order to, on the one hand, slow down China's advanced semiconductor process progress, and on the other hand, expand the market share of American semiconductor factories, ensure that American factories continue to earn world wealth, and ultimately achieve the goal of making America great again.

Regarding the three bans Huawei has encountered, the article believes that from the first ban on Huawei using US products in May 2019, to the ban on Huawei chips using US technology in May 2020, and then to the expanded interpretation in August 2020 to ban Huawei from purchasing chips containing US technology, it is equivalent to a step-by-step comprehensive blockade of Huawei. But at the same time, the United States opened a backdoor to allow US manufacturers to supply Huawei with non-high-end chips, and issued export licenses to US manufacturers one after another at the end of last year.

After the Huawei ban officially took effect on September 15 this year, AMD immediately stated that it had obtained a license to sell products from "certain companies" on the US "Entity List", meaning that Huawei's products such as the Matebook using AMD processors would not be affected. Judging from the time, AMD's license should have been obtained when the ban on US factories was imposed in 2019, and it can continue to be used without being affected by this year's ban on non-US factories. Similarly, Intel also stated that the license applied for at the end of 2019 has been approved by the United States, and it will continue to promote cooperation with Huawei in the notebook field, and it can be more certain that the license issued in 2019 will be valid after September 15, 2020.

The article further pointed out that AMD and Intel both supply Huawei laptop-related components and are not the focus of the US crackdown on Huawei in 5G-related fields. In addition, Huawei's position in industries such as laptops is still not as good as that in mobile phones, which may be the reason why the US is willing to let them go.

The article analyzes that as long as the US manufacturers obtained a license last year, they should be able to continue to ship to Huawei. For example, Micron issued a statement on December 18 last year saying that it had received all requested licenses and lifted the ban on the sale of most products. Microsoft stated on November 20 last year that it had obtained a license application to sell software to Huawei.

The article points out that the US-China technology cold war will make the flow of semiconductor industry in the future no longer as comprehensive and free as in the past, and both sides will establish their own production supply chain. Overall, it is a favorable situation for Taiwan's semiconductor industry.

In fact, since the second half of 2019, mainland brand manufacturers and semiconductor manufacturers have cooperated with the goals of localization and de-Americanization to set off a wave of self-developed chips. American brand manufacturers such as Apple have also begun to pursue product differentiation and embark on the path of self-developed chips. The two major demand momentums have brought a good situation for the operation of IP, ASIC, and design service factories in Taiwan.

Analysts pointed out that since mainland IC design factories, mobile phone factories or system factories do not have enough chip design talents or know-how, if they want to speed up the completion of the design of self-developed chips, customized chips must meet the product differentiation requirements of mobile phone factories or system factories, and at the same time avoid using American technology, they can only rely on the firepower support of Taiwan's IP factories or design service factories.

In addition, TSMC and other wafer foundries have limited technical support teams for ASIC and design services, and are simply unable to meet all customer needs, resulting in the outsourcing of technical support work for some customers, which has become another important source of market demand for ASIC and design services. For example, TSMC's partners, such as Creative and Alchip, have naturally become beneficiaries of this trend.