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These chips could have been manufactured by TSMC before the US issued an export ban: > It is unclear how the chip made its way to Huawei. In 2019, the company

These chips could have been manufactured by TSMC before the US issued an export ban: > It is unclear how the chip made its way to Huawei. In 2019, the company released its Ascend 910 chip series. At the time, prior to export controls, the chips were produced by TSMC, two sources told Reuters earlier this year. The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business often comes up in these discussions. I've often seen the response that this is US technology, and that any country would apply similar controls to its own technologies. What I don't think people realize is that these sorts of "secondary" controls are very unusual, internationally. The US imposes controls on goods manufactured abroad using US-made tools or intellectual property. This is a bit like the way that the GPL "infects" other projects, and forces them to abide by its terms, and to my knowledge, the US is the only country that does this (in any case, it's the only country doing this on such a large scale). If you think of how integrated the world economy is, these sorts of "infectious" controls are extremely disruptive.

burnte 2y ago
They say "if you want to do business in the US, with US companies, don't deal with these people/groups/countries."
- j_walter 2y ago
  Exactly this...and since the US is by far the biggest revenue source for semiconductors it would be stupid to ignore this rule. Taiwan in general wants to maintain favor with the US because of the invasion threat of China as well (although I'm not 100% confident the US would get involved in that fight).
  - joshuaissac 2y ago
    > US is by far the biggest revenue source for semiconductors It's actually China, where sales account for 29% of global semiconductor sales, compared to 26% for the Americas (NA & SA). https://www.semiconductors.org/wp-content/uploads/2024/10/SIA_2024_State-of-Industry-Report.pdf https://www.semiconductors.org/wp-content/uploads/2024/10/SI... (PDF)
    - oskarkk 2y ago
      I guess this doesn't take into account semiconductors that go to China to be used in devices manufactured there, and then sold to other countries? I'd have thought that wealthy and IT-heavy USA together with other countries in the Americas (1B people) are buying more end products with semiconductors than China. Also, Europe (wealthy 9% of world pop) probably buys more semiconductors (in end products) than 11%.
      - londons_explore 2y ago
        Remember the population of China is huge. I could totally imagine China out-buying the USA in consumer electronics.
    - newprint 2y ago
      thank you for posting this link, very interesting reading. If you have more of the similar materials, I would be very interested. Thank you !
      - joshuaissac 2y ago
        Other than reports from the Semiconductor Industry Association (SIA), which represents the American semiconductor industry and published the above report, there are also the reports with past data and forecasts from World Semiconductor Trade Statistics (WSTS): https://www.wsts.org/76/PRESS-ARCHIVE https://www.wsts.org/76/PRESS-ARCHIVE These are not as frequent or detailed as the SIA reports, but they are another source for comparison. You can also check import/export/re-export statistics by industry and country using the International Trade Centre's Trade Map tool: https://www.trademap.org/Index.aspx https://www.trademap.org/Index.aspx This does not include goods that are produced and used domestically.
- DiogenesKynikos 2y ago
  US sanctions go far beyond that. As I said, US sanctions are designed to be highly "infectious," so that activities that don't seem to have any US connection fall under the US sanctions regime. The world economy is tightly interconnected, so almost any economic activity anywhere on Earth has at least some incidental, indirect connection to the US (and to China, and to the EU). Imposing such a wide-ranging secondary sanctions regime is extremely disruptive, and it's viewed by other countries as an attack on their sovereignty. When Trump pulled out of the Iran nuclear deal, he effectively forced the EU to also renege on the deal, because US sanctions banned virtually every EU company from doing business with Iran. The EU could no longer determine its own trade and foreign policy with Iran. The answer to this is probably for other countries that want to retain their sovereignty to impose retaliatory sanctions on the US when it targets their companies. The EU is not sufficiently politically unified to do this, though, and most other countries/blocs (except for China) don't have the heft to go one-on-one against the US.
  - UltraSane 2y ago
    "for other countries that want to retain their sovereignty to impose retaliatory sanctions on the US when it targets their companies." I wouldn't hold your breath.
  - RandomThoughts3 2y ago
    The issue is that the US has used sanctions dishonestly in the past as a way to remove competitors from markets it's planning to let its own companies take over at a later point. Fully trusting the US is foolish. It's a fickle ally.
deleted 2y ago
[deleted]
pessimizer 2y ago
> The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business often comes up in these discussions. The US doesn't have to justify what it asks for, it does that as a convenience for Taiwanese politicians. Why it has the power is a historical question irrelevant to whether it has the power. Why it has the right? Rights are implemented with power. Proving that the US is wrong according to some moral or rational standard is just an intellectual exercise.
- nomel 2y ago
  > Why it has the power is a historical question I don't think history is necessary. With Apple alone being around 25% of their income [1], them losing a fraction of the money from the US would almost certainly be worse than losing whomever the US doesn't like at the moment. [1] https://focustaiwan.tw/business/202303030016 https://focustaiwan.tw/business/202303030016
  - throw310822 2y ago
    Hmm, what if TSMC just told the US, "ok, go screw yourself, I'll sell my services to anyone but you and your companies? Yes, TSMC would lose a lot. But arguably the damage to the US would be a lot more. But of course ultimately the US has guns and TSMC doesn't, and the US wouldn't accept this type of outcome.
    - IncreasePosts 2y ago
      This would be a great way to go out of business. Every single one of their suppliers, and customers, would need to make the same choice simultaneously. As a simple example, how long would TSMC survive without new machines and support from ASML?
    - threeseed 2y ago
      US can simply impose sanctions on any company using TSMC. At which point TSMC would lose most of their customer base overnight. US is a superpower not just because of guns but because it is a large economy with lots of innovative and globally significant companies.
threeseed 2y ago
Have you never heard of sanctions before ? These are legal mechanisms that dictate the behaviour of companies and are routinely imposed even when the company has no presence in the country. It is extremely common in the financial sectors e.g. AML/KYC. Right now the EU for example has sanctions against Russia and Chinese entities.
- DiogenesKynikos 2y ago
  What I wrote seems to have gone completely over your head. Other countries impose sanctions, but "secondary" sanctions are very unusual. I don't know of any other country that imposes secondary sanctions on anywhere near the scale that the United States does. It is extremely unusual for countries other than the US to try to impose their own sanctions regimes on foreign companies operating outside their territory, based only on extremely incidental connections (like use of software written in the country imposing sanctions).
  - salawat 2y ago
    Only the United States has raised weaponization of network effects to essentially the pinnacle of warfare. Which in essence, geopolitics is.
    - kube-system 2y ago
      "Don't deal with my enemies if you want to be my friend" has been a thing since the ancestors of humans were living in caves and carrying clubs.
      - 8note 2y ago
        Dont deal with people who deal with my enemies either.
        riehwvfbk 2y ago
        Don't deal with some of the people who deal with my enemies. Turkey always gets a special exemption, as do the Saudis.
chaostheory 2y ago
> The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business The reason is because the US provides the brunt of security for Taiwan against China. The rule applies if you want continued access to our domestic market.
- sidewndr46 2y ago
  I'm surprised this isn't higher up in the comments. Historically the island of Taiwan was "China" according to the US. The switch happened thanks to a career criminal, Richard Nixon. US textbooks conveniently omit this entirely. Taiwan is certainly an independent government welcome to pass its own laws and govern itself. But for military defense, the US has been in charge since the end of the civil war. The same is true of several other Pacific island nations. The international relations of Taiwan is a non-issue because outside of Haiti I don't think anyone bothers to recognize them.
rescbr 2y ago
> The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business often comes up in these discussions. US Dollar hegemony. If a company is banned doing business in USD, no large banks will want to touch them.
RandomThoughts3 2y ago
The US imposes controls on trade made in dollars even when said trades as absolutely nothing to do with the US. Why? Because the US thinks they can. It will be fine until it isn't anymore. China definitely is pushing hard to get the renminbi viewed as a global currency.
- eldgfipo 2y ago
  Why would it want to ? They're export-driven : becoming a reserve currency is not in their interest. The RMB would appreciate and hurt their competitiveness. Plus, they wouldn't be able to control/drive its value down once it has spread over their border. They paradoxically need to be mostly self-reliant and therefore grow their consumer-base before that happen otherwise they're just putting their fingers in the cogs.
  - RandomThoughts3 2y ago
    China upstart phase when they viewed themselves as purely export-driven to shore up their economy is over. They now think of themselves as a global power with an internal market deep enough to sustain their own growth and deep tie with countries in Africa and South East Asia with which they would rather do business in their own currency as a way to shore up their depencies towards them. You are confusing current China with China a decade ago.
    - mensetmanusman 2y ago
      Their internal market has deflation and their population is dropping millions per year.
      - DiogenesKynikos 2y ago
        Oh no, at that rate, China will have no more workers left in 1400 years! But in all seriousness, even though China's population is slowly shrinking, the population of highly educated people is growing.
Brian_K_White 2y ago
Taiwan has the same right as any state to tell any other state to go fly a kite, and TSMC has the same right as any vendor to tell any customer to go fly a kite. Perhaps they are not a 15 year old boy and think about ramifications before saying something like that. GPL doesn't infect anything any more than any other licenses terms, because you don't have to use any software whose terms you don't like, whether those terms are cash per seat or give-as-was-given-to-you. I hear more 15 year old boy.

burnte 2y ago

They say "if you want to do business in the US, with US companies, don't deal with these people/groups/countries."

j_walter 2y ago
Exactly this...and since the US is by far the biggest revenue source for semiconductors it would be stupid to ignore this rule. Taiwan in general wants to maintain favor with the US because of the invasion threat of China as well (although I'm not 100% confident the US would get involved in that fight).
- joshuaissac 2y ago
  > US is by far the biggest revenue source for semiconductors It's actually China, where sales account for 29% of global semiconductor sales, compared to 26% for the Americas (NA & SA). https://www.semiconductors.org/wp-content/uploads/2024/10/SIA_2024_State-of-Industry-Report.pdf https://www.semiconductors.org/wp-content/uploads/2024/10/SI... (PDF)
  - oskarkk 2y ago
    I guess this doesn't take into account semiconductors that go to China to be used in devices manufactured there, and then sold to other countries? I'd have thought that wealthy and IT-heavy USA together with other countries in the Americas (1B people) are buying more end products with semiconductors than China. Also, Europe (wealthy 9% of world pop) probably buys more semiconductors (in end products) than 11%.
    - londons_explore 2y ago
      Remember the population of China is huge. I could totally imagine China out-buying the USA in consumer electronics.
  - newprint 2y ago
    thank you for posting this link, very interesting reading. If you have more of the similar materials, I would be very interested. Thank you !
    - joshuaissac 2y ago
      Other than reports from the Semiconductor Industry Association (SIA), which represents the American semiconductor industry and published the above report, there are also the reports with past data and forecasts from World Semiconductor Trade Statistics (WSTS): https://www.wsts.org/76/PRESS-ARCHIVE https://www.wsts.org/76/PRESS-ARCHIVE These are not as frequent or detailed as the SIA reports, but they are another source for comparison. You can also check import/export/re-export statistics by industry and country using the International Trade Centre's Trade Map tool: https://www.trademap.org/Index.aspx https://www.trademap.org/Index.aspx This does not include goods that are produced and used domestically.
DiogenesKynikos 2y ago
US sanctions go far beyond that. As I said, US sanctions are designed to be highly "infectious," so that activities that don't seem to have any US connection fall under the US sanctions regime. The world economy is tightly interconnected, so almost any economic activity anywhere on Earth has at least some incidental, indirect connection to the US (and to China, and to the EU). Imposing such a wide-ranging secondary sanctions regime is extremely disruptive, and it's viewed by other countries as an attack on their sovereignty. When Trump pulled out of the Iran nuclear deal, he effectively forced the EU to also renege on the deal, because US sanctions banned virtually every EU company from doing business with Iran. The EU could no longer determine its own trade and foreign policy with Iran. The answer to this is probably for other countries that want to retain their sovereignty to impose retaliatory sanctions on the US when it targets their companies. The EU is not sufficiently politically unified to do this, though, and most other countries/blocs (except for China) don't have the heft to go one-on-one against the US.
- UltraSane 2y ago
  "for other countries that want to retain their sovereignty to impose retaliatory sanctions on the US when it targets their companies." I wouldn't hold your breath.
- RandomThoughts3 2y ago
  The issue is that the US has used sanctions dishonestly in the past as a way to remove competitors from markets it's planning to let its own companies take over at a later point. Fully trusting the US is foolish. It's a fickle ally.

deleted 2y ago

[deleted]

pessimizer 2y ago

> The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business often comes up in these discussions. The US doesn't have to justify what it asks for, it does that as a convenience for Taiwanese politicians. Why it has the power is a historical question irrelevant to whether it has the power. Why it has the right? Rights are implemented with power. Proving that the US is wrong according to some moral or rational standard is just an intellectual exercise.

nomel 2y ago
> Why it has the power is a historical question I don't think history is necessary. With Apple alone being around 25% of their income [1], them losing a fraction of the money from the US would almost certainly be worse than losing whomever the US doesn't like at the moment. [1] https://focustaiwan.tw/business/202303030016 https://focustaiwan.tw/business/202303030016
- throw310822 2y ago
  Hmm, what if TSMC just told the US, "ok, go screw yourself, I'll sell my services to anyone but you and your companies? Yes, TSMC would lose a lot. But arguably the damage to the US would be a lot more. But of course ultimately the US has guns and TSMC doesn't, and the US wouldn't accept this type of outcome.
  - IncreasePosts 2y ago
    This would be a great way to go out of business. Every single one of their suppliers, and customers, would need to make the same choice simultaneously. As a simple example, how long would TSMC survive without new machines and support from ASML?
  - threeseed 2y ago
    US can simply impose sanctions on any company using TSMC. At which point TSMC would lose most of their customer base overnight. US is a superpower not just because of guns but because it is a large economy with lots of innovative and globally significant companies.

threeseed 2y ago

Have you never heard of sanctions before ? These are legal mechanisms that dictate the behaviour of companies and are routinely imposed even when the company has no presence in the country. It is extremely common in the financial sectors e.g. AML/KYC. Right now the EU for example has sanctions against Russia and Chinese entities.

DiogenesKynikos 2y ago
What I wrote seems to have gone completely over your head. Other countries impose sanctions, but "secondary" sanctions are very unusual. I don't know of any other country that imposes secondary sanctions on anywhere near the scale that the United States does. It is extremely unusual for countries other than the US to try to impose their own sanctions regimes on foreign companies operating outside their territory, based only on extremely incidental connections (like use of software written in the country imposing sanctions).
- salawat 2y ago
  Only the United States has raised weaponization of network effects to essentially the pinnacle of warfare. Which in essence, geopolitics is.
  - kube-system 2y ago
    "Don't deal with my enemies if you want to be my friend" has been a thing since the ancestors of humans were living in caves and carrying clubs.
    - 8note 2y ago
      Dont deal with people who deal with my enemies either.
      - riehwvfbk 2y ago
        Don't deal with some of the people who deal with my enemies. Turkey always gets a special exemption, as do the Saudis.

chaostheory 2y ago

> The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business The reason is because the US provides the brunt of security for Taiwan against China. The rule applies if you want continued access to our domestic market.

sidewndr46 2y ago
I'm surprised this isn't higher up in the comments. Historically the island of Taiwan was "China" according to the US. The switch happened thanks to a career criminal, Richard Nixon. US textbooks conveniently omit this entirely. Taiwan is certainly an independent government welcome to pass its own laws and govern itself. But for military defense, the US has been in charge since the end of the civil war. The same is true of several other Pacific island nations. The international relations of Taiwan is a non-issue because outside of Haiti I don't think anyone bothers to recognize them.

rescbr 2y ago

> The question of why the US has the right or power to tell TSMC, a Taiwanese company, who it is allowed to do business often comes up in these discussions. US Dollar hegemony. If a company is banned doing business in USD, no large banks will want to touch them.

RandomThoughts3 2y ago

The US imposes controls on trade made in dollars even when said trades as absolutely nothing to do with the US. Why? Because the US thinks they can. It will be fine until it isn't anymore. China definitely is pushing hard to get the renminbi viewed as a global currency.

eldgfipo 2y ago
Why would it want to ? They're export-driven : becoming a reserve currency is not in their interest. The RMB would appreciate and hurt their competitiveness. Plus, they wouldn't be able to control/drive its value down once it has spread over their border. They paradoxically need to be mostly self-reliant and therefore grow their consumer-base before that happen otherwise they're just putting their fingers in the cogs.
- RandomThoughts3 2y ago
  China upstart phase when they viewed themselves as purely export-driven to shore up their economy is over. They now think of themselves as a global power with an internal market deep enough to sustain their own growth and deep tie with countries in Africa and South East Asia with which they would rather do business in their own currency as a way to shore up their depencies towards them. You are confusing current China with China a decade ago.
  - mensetmanusman 2y ago
    Their internal market has deflation and their population is dropping millions per year.
    - DiogenesKynikos 2y ago
      Oh no, at that rate, China will have no more workers left in 1400 years! But in all seriousness, even though China's population is slowly shrinking, the population of highly educated people is growing.

Brian_K_White 2y ago

Taiwan has the same right as any state to tell any other state to go fly a kite, and TSMC has the same right as any vendor to tell any customer to go fly a kite. Perhaps they are not a 15 year old boy and think about ramifications before saying something like that. GPL doesn't infect anything any more than any other licenses terms, because you don't have to use any software whose terms you don't like, whether those terms are cash per seat or give-as-was-given-to-you. I hear more 15 year old boy.