Thread by @Wenyee_Lee

I spoke with #TSMC's Former General Counsel Richard "Dick" Thurston on how to interpret the #China provision in the #CHIPSAct. One provision prevents recipients of the funding from expanding advanced chip capacity in China in next 10 years. What is exactly restricted? (1/11)

"..the covered entity MAY NOT engage in any SIGNIFICANT TRANSACTION....involving the MATERIAL EXPANSION of semiconductor manufacturing capacity in the People’s Republic of China." The restriction is designed for advanced node under 28-nanometer (28nm not included). (2/11)

As for memory, analog and packaging technologies, the restriction would be on any #legacy generation of semiconductor technology relative to logic chips under 28nm...as determined by Secretary of #Commerce. Not clear how to define the technologies mentioned above yet. (3/11)

Facts: TSMC has two fabs in China, one in Nanjing with 16/28nm capacities and one in Shanghai with 8-inch legacy nodes. Nanjing fab could be impacted if 16nm not allowed for expansion. Shanghai fab should be safe. (4/11)

Thurston told me that that "it is deliberately left wording vaguer than originally was being proposed to allow for more flexibility on how it's applied." He also says he could argue 16nm and 22nm has no difference with 28nm materially. If so, TSMC's 16nm could be safe. (5/11)

#Intel also has packaging factories in China. But packaging uses older technologies. A veteran semi analyst told me it does not make sense to ban packaging expansion. Intel's NAND Flash factory was sold to Hynix last year. So INTEL has no front end manufacturing in China. (6/11)

#Samsung has 2 advanced 3D NAND factories in China, which accounted for over 40% of the company's total #NAND capacity. Could be impacted too if doing expansion. But again, the definition of memory and packaging is vague. (7/11)

One thing needs to be noted: #TSMC follows US export control requirements strictly. "Whatever TSMC invests in China is all subject to that and they're very strict in how they apply that," Thurston believes TSMC and others should be okay to live with CHIPS Act restriction. (8/11)

However, "the standards that are set here will create guidelines, and I know for sure that the US will put pressure on other countries to follow similarly on their allies," Thurston says,"We're moving further into a period of extreme conservative #nationalism." (9/11)

This could be #Taiwan's chance as well. #TSMC and #MediaTek already collaborate with universities like Purdue. "Tsai Ing-wen says we [Taiwan] have to remove our dependency on China, Thurston says, "use it [CHIPS Act] as the opportunity to get more involved in the US."(10/11)

Full article and interview QA with Thurston in Chinese: businessweekly.com.tw/Archive/Digita… (11/11)