TSMC triples US investment with 2nd chip plant; Texas latest state to ban TikTok on govt devices & Xi says China "will work to buy" Gulf oil in yuan -- China Boss News 12.12.22
Newsletter -- *China Boss will be on holiday break beginning next Monday, Dec. 19, 2022 -Friday, Jan. 6, 2023.
The Big Story in China Business
“Masterstroke and game-changing”: TSMC triples US investment with 2nd plant
“President Joe Biden [joined] the founder of Taiwan Semiconductor Manufacturing Co. on Tuesday to announce the opening of the company's second chip plant in Arizona, raising its investment in the state from $12 billion to $40 billion,” CNBC reported. “The investment by TSMC is one of the largest foreign investments in U.S. history, and the biggest in the state of Arizona,” news staff said.
CNBC:
Once the TSMC plants open, they, along with existing investments, will produce enough advanced chips to meet the U.S. annual demand, 600,000 wafers per year, according to Ronnie Chatterji, National Economic Council acting deputy director for industrial policy who oversees CHIPS implementation.
"It's the foundation of our personal electronics, and also the future of quantum computing and AI," Chatterji said. "At scale, these two [factories] could meet the entire U.S. demand for U.S. chips when they're completed. That's the definition of supply chain resilience. We won't have to rely on anyone else to make the chips we need."
Nikkei Asia’s senior tech correspondent Cheng Ting-Fang said the tripling of TSMC's US investment was “a victory for Washington's push to onshore vital parts of the semiconductor supply chain.”
Ting-Fang, Nikkei Asia:
Apple and chipmakers AMD and Nvidia will be among the first customers buying chips from TSMC's Arizona plant, according to an announcement by the company and the White House, confirming an earlier Nikkei Asia report. AMD told Nikkei Asia that it "looks forward to having its most advanced chip products built in TSMC's Arizona fabs." Nvidia's CEO Jensen Huang said in a statement that "bringing TSMC's investment to the United States is a masterstroke and a game-changing development for the industry."
The announcement was made in the wake of the passage of the CHIPS and Science Act signed into law last summer. Brian Deese, director of the National Economic Council, said that the law’s passage “was absolutely critical in providing the long term certainty for companies like TSMC to expand their footprint and expand their commitment to the United States.”
CNBC:
"Whether it's in electric vehicles or consumer electronics, CEOs of major companies are making decisions about their plans 18 to 24 months forward," Deese said. "The build out in the United States gives them more confidence to operate as well."
TSMC's first plant, also located in Phoenix, will begin producing chips by 2024, while the newly-announced plant will open in 2026. “The expansion is so significant” that the opening ceremony drew Apple CEO Tim Cook and other industry titans, in addition to top government officials, New York Times said.
For the rest of CNBC’s report, TSMC to up Arizona investment to $40 billion with second semiconductor chip plant, click here. For Cheng’s update in Nikkei Asia, TSMC to triple U.S. chip investment to $40bn to serve Apple, others, click here. For NYT’s coverage, In Phoenix, a Taiwanese Chip Giant Builds a Hedge Against China, click here.
Law and International Xi
Texas latest to ban TikTok on government devices
On Wednesday, Texas governor Greg Abbott banned TikTok on government-issued devices, becoming the latest in a slew of states to do so, the Guardian said. In a letter addressed to one of the state agencies, Abbott cited national security concerns, saying “TikTok harvests vast amounts of data from its users’ devices” that it “offers” to the Chinese government.
The Guardian:
“While TikTok has claimed that it stores US data within the US, the company admitted in a letter to Congress that China-based employees can have access to US data. It has also been reported that ByteDance planned to use TikTok location information to surveil individual American citizens,” it added.
The letter also cited China’s 2017 National Intelligence Law, stating that businesses are required to assist China in intelligence work including data sharing. It recounted that TikTok’s algorithm had already censored topics politically sensitive to the Chinese Communist Party, including the Tiananmen Square protests.
Nebraska, Indiana, Maryland, South Dakota, and South Carolina have also prohibited state employees from using TikTok while on work-related computers and mobile phones. On Tuesday, Wisconsin Republicans called on their governor “to delete TikTok” from state devices over national security concerns, the Guardian said.
For the rest of the Guardian’s update, Texas bans TikTok on government devices amid China data-sharing fears, click here.
Hong Kong officials suggest moving Jimmy Lai’s national security trial to Mainland
“A legal battle over Hong Kong’s effort to prosecute media tycoon Jimmy Lai on national security charges has made the once-unthinkable an imminent threat: moving sensitive cases to mainland Chinese courts,” Bloomberg’s Kari Soo Lindberg reported.
The controversy arose when Hong Kong Chief Executive John Lee asked “China’s top legislative body to intervene and prevent lawyers based overseas from participating,” immediately after the “city’s highest court ruled that the founder of the now defunct Apple Daily newspaper could hire a renowned UK-based lawyer to defend him,” she said.
Lindberg, Bloomberg:
Hong Kong’s sole representative on that body subsequently suggested that defendants who failed to find local lawyers could find their cases transferred to Chinese courts, where national security trials are speedier and more secretive.
“If such difficulties really arise, they can be sent back to the mainland for trial,” Tam Yiu-chung, a member of the National People’s Congress Standing Committee, told reporters Sunday in Hong Kong.
In an earlier op-ed, Bloomberg columnist Matthew Brooker said Lai's case "rattles Beijing,” but that the Chinese government “has good reason to fear him.”
Brooker, Bloomberg:
Unlike most Hong Kong business figures, who out of commercial pragmatism support the Beijing government, Lai has refused to bend. He could easily have taken his millions and left the city, as so many have done since the passage of the security law. That makes him a symbol of integrity, endurance and inspiration for those who hope for eventual political change in China. The Communist Party has just had a lesson in the power of example, with overtly anti-government demonstrations spreading across major cities for the first time in decades late last month. It may have good reason to fear him.
For the rest of Lindberg’s report in Bloomberg, Hong Kong Threat to Move Jimmy Lai Case to China Revives Fears, click here. For Brooker’s op-ed, Why a Jailed Media Tycoon Rattles Beijing, click here.
Safeguard Defenders: Italy has highest number of overseas Chinese “police stations”
Italy is “home” to “the highest number of unofficial Chinese ‘police stations’ out of a network of more than 100 around the world,” according to a new report cited by the Guardian. The report released Monday by Madrid-based Safeguard Defenders “identified 48 additional stations, 11 of which are in Italy.” It also added Croatia, Serbia and Romania to the list of potentially illegal overseas Chinese police stations for the first time, news staff said.
The Guardian:
The northern Italian city of Milan was allegedly used by two local Chinese public security authorities as a European testing ground for a policing strategy to monitor the Chinese population abroad and force dissidents to return home.
The Madrid-based Safeguard Defenders reported in September that 54 such stations allegedly existed around the world, prompting police investigations in at least 12 countries including Canada, Germany and the Netherlands.
“The Italian stations are in Rome, Milan, Bolzano, Venice, Florence, Prato – a town near Florence that hosts the largest Chinese community in Italy – and Sicily,” the Guardian said.
For the rest of the Guardian’s report, Italy home to 11 of 100-plus unofficial Chinese ‘police stations’, click here. To read the original “follow up” report on Safeguard Defender’s website, click here.
Geopolitics
US and Taiwan could sign bilateral trade deal in 2023
Keep reading with a 7-day free trial
Subscribe to China Boss News to keep reading this post and get 7 days of free access to the full post archives.