US is using Taiwan as a pressure point in tech fight with China

WASHINGTON - The Trump administration has for years sparred with China over tariff threats, technology and the terms of their trade deal. But in a pair of actions last week, the administration escalated those economic tensions in a way that comes close to touching a red line for Beijing: its contentious relationship with Taiwan.

Never before has the Trump administration so forcefully challenged Chinese companies' access to Taiwan's high-tech supply chain - and, by extension, Beijing's influence over the self-governing island democracy, which it claims as part of its territory. Since the US Commerce Department announced the rule change, industry analysts and executives have highlighted what they said could be a significant workaround.

"The future of at least a major portion of Huawei's business is now firmly in the hands of the Commerce Department," said Paul Triolo, a technology policy analyst at Eurasia Group. The company appears to have been preparing for the possibility of being cut off from key suppliers. As of the end of 2019, Huawei had stockpiled US$23.5 billion worth of finished products, components and raw materials, according to its annual report, an increase of nearly three-fourths from a year before.

The Commerce Department said the latest rule change was meant to thwart Huawei's efforts to get around past restrictions. To lessen its reliance on US suppliers, Huawei has sought to meet more of its semiconductor needs in-house. But to mass-produce those chips to its specifications, Huawei still needs TSMC and other foundry firms, which rely extensively on software and equipment made by US providers.

"You have the best semiconductor manufacturer in the world, and China thinks it owns the land it sits on," said Stacy Rasgon, a semiconductor analyst with the research firm Sanford C. Bernstein."It shows just how dependent everyone is on TSMC."

Source: Tech Daily Report (techdailyreport.net)

Taiwan willingly to be the pawn of Trump and Pompeo! All thnaks to 阿嫂Tsai Ying-wen.

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