TSMC vows not to share sensitive customer data following US request

The Biden administration says the data would help alleviate bottlenecks in the semi conductor supply chain

TSMC has said it is mulling how best to respond to a voluntary request from the US government to share information about its supply chain without revealing sensitive client information, the company revealed this week.

The US has given global chipmakers and electronics device makers until 8 November to voluntarily send in information on their production capacity, inventories, and who their key customers are in an attempt to understand and quantify where bottlenecks may exist in the global chip supply chain.

However, the Biden administration has also said that it may reintroduce a law, first created during the Cold War era, to force companies to share data if they fail to comply with the request.

The decision has raised concerns among companies like TSMC, who believe the information would include highly sensitive trade secrets, according to Nikkei Asia.

"We will definitely not leak our company's sensitive information, especially that related to our customers," said Sylvia Fang, TSMC's general counsel. "We are still at the stage of doing some preliminary research and evaluating the contents of the questionnaire [sent by the U.S. government]," Fang said.

She added that TSMC believes there are ways to address the questionnaire without compromising confidential client information, and that the company is waiting for the US government to provide an FAQ sheet before answering the request.

The questionnaire includes 13 main questions for semiconductor manufacturers and chip developers, and asks companies to list each product’s top three current customers and the estimated percentage of that product’s sales accounted for by each customer. Other questions include what the respondent’s product with the biggest backlog is and also asks them to identify the amount of sales for its products.

US Commerce secretary Gina Raimondo warned last month that if companies don’t respond to the questionnaire, she may consider invoking the Defense Production Act, first introduced in 1950 in response to the outbreak of the Korean War, which would force the companies to disclose the information.

“What I told them is, ‘I don’t want to have to do anything compulsory but if they don’t comply, then they’ll leave me no choice,’” she said.

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The request from the US has raised concerns across the industry about the protection of trade secrets and business competitiveness, with TSMC’s local investors filing for a provisional injunction in a Taiwanese court requesting that the chipmaker should not be allowed to send critical trade secrets abroad.

Although no Chinese companies are directly involved in the request, it has worried organisations in the country’s semiconductor industry, which has previously faced US sanctions restricting access to advanced chip equipment and technologies, according to the South China Morning Post.

“This move by the US will help it create domestic jobs, accurately acquire international companies with potential, and place sanctions on key Chinese companies,” said Xi Chen, an academic committee member from Peking University’s Institute for Global Cooperation and Understanding. “The only way to achieve these things is through identifying key costs.”

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