US-China Tensions See Tech Firms Offer More For TSMC Chips

The world’s top chipmaker, TSMC, has received a rush of orders from Chinese tech ‘heavyweights’, according to a report by Trendforce, which cited Technews and ijiwei

It said Bitmain, Alibaba’s T-Head and Sanechips were urgently wanting to stockpile the company’s chips because of “escalating tensions between the US and China”, and “uncertainties arising from the upcoming US presidential election and its impact on US-China relations.”

The Chinese companies allegedly offered to pay TSMC 40% over its usual prices, the report said, noting that the Taiwanese firm’s sales to clients in China rose from 9% of wafer revenue in the previous quarter to 16%.

TSMC is currently enjoying a boom because of huge demand its 3-nanometre chips “with major clients like Apple and Nvidia eagerly booking for more capacity”, for high-end smartphones and devices with artificial intelligence (AI), the report said.

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Memory chips made by South Korean semiconductor supplier SK Hynix are on a circuit board. Photo: Reuters — Reuters image.

Meanwhile, in other chip news, the world’s second-largest maker of memory chips, SK Hynix, said on Friday it had decided to invest about 9.4 trillion won ($6.8 billion) in its first chip plant in the South Korean city of Yongin.

The Nvidia supplier, which reported on Thursday its highest earnings since 2018 and flagged rising AI chip demand, has been planning investment since 2019 on four new chip plants at a semiconductor cluster at the site near Seoul.

“The Yongin cluster will be the foundation for SK Hynix’s mid- to long-term growth,” Kim Young-sik, the firm’s manufacturing technology chief, said.

The investment aims to respond to demand for AI semiconductors and secure future growth, SK Hynix said in a regulatory filing.

The sprawling 4.2 million square-metre site, will eventually house the company’s four planned chip plants producing next-generation semiconductors, as well as more than 50 small local firms in the chip industry, SK Hynix said in a statement.

Friday’s figure is expected to cover work on the first plant until end-2028, for utilities such as water and electricity, as well as business support and welfare facilities.

It will include a “mini-fab”, or research facility that can process 300-mm silicon wafers, to allow domestic chip materials and equipment makers to test their products in a realistic setting, the company said.

The news follows the company’s plan, unveiled in April, to invest about $3.87 billion for an advanced packaging plant and research and development facility for AI products in the US state of Indiana.