Taiwan Semiconductor Manufacturing Co. is purging Chinese equipment from its most advanced production facilities as the chipmaker moves to protect billions in potential US government funding, Nikkei reported.
The world’s largest contract manufacturer will exclude Chinese tools from its cutting-edge 2-nanometer production lines, which begin mass production this year in Hsinchu before expanding to Kaohsiung. The company is constructing a third facility in Arizona that will eventually produce the same technology.
TSMC previously relied on Chinese equipment suppliers including Advanced Micro-Fabrication Equipment Inc. for etching tools and Mattson Technology systems in earlier production nodes. The shift represents a calculated response to proposed US legislation that would bar companies receiving federal subsidies from purchasing equipment from “foreign entities of concern” – a designation widely understood to include Chinese manufacturers.
The Taiwanese giant has already secured US$6.6 billion in direct funding and up to US$5 billion in loans under the CHIPS and Science Act for its Arizona operations. The proposed Chip EQUIP Act, though still pending in Congress, threatens to revoke such support for companies that maintain Chinese equipment ties.
Beyond production tools, TSMC is conducting a comprehensive review of all Chinese-sourced materials and chemicals across its Taiwan and US operations, according to sources briefed on the matter. The company continues sourcing locally for its mainland China facilities to align with Beijing’s industrial policies.
The equipment purge underscores how geopolitical tensions are forcing semiconductor companies to choose sides in an increasingly bifurcated industry.
