TSMC and ASML have turned to the Chinese market

Recently, TSMC and lithography giants have expressed goodwill to China one after another. Industry insiders believe that this is because the Chinese market is too important, and they cannot leave the Chinese market in the current environment. This is in sharp contrast to the fact that the United States has repeatedly attracted these enterprises with technological advantages to restrict Chinese chips.
TSMC and ASML have turned to the Chinese market, which is a showdown to the United States
TSMC announced that it would continue to promote the 28-nanometer production line of the Nanjing factory after it announced the mass production of 3 nanometers in Taiwan. It will take the lead in mass production of advanced technology in Asia, which is undoubtedly hoping to win the support of manufacturers in Asia, while expanding the capacity of the Nanjing factory is obviously hoping to win the order of Chinese chips.
TSMC did so because of the lessons it learned when it went to the United States to set up factories. It began to set up factories in the United States in 2020. In October 2022, it also shipped 300 technical backbones and family members from Taiwan and related EUV lithography machines to the United States to show its good intentions to the United States. However, the result was that the chip subsidies given by the United States to TSMC were less than a fraction of Intel’s, and many chip companies in the United States reduced their orders, resulting in a sharp decline in the utilization rate of 7nm and 5nm capacity of TSMC.
It is also imperative for American chips to do so, because in 2022, China reduced the purchase volume of 97 billion chips, resulting in a decline in the performance of American chips, which account for half of the market share. In order to control costs, American chips had to reduce investment and lay off workers, and order reduction has become a means to ensure cash flow.
As for the chip subsidy, which is only a poor 10% share, it shows that American chips do not regard TSMC TV as their own person, let alone because TSMC actively supports the manufacturing of chips in the United States. After the dust settles, the United States can obtain relevant technologies and talents, and the goal of helping Intel, the local chip enterprise in the United States, improve its technology level has been achieved, As a result, the chip subsidies promised before were significantly reduced.
TSMC and ASML have turned to the Chinese market, which is a showdown to the United States
In fact, the experience of ASML is quite similar to that of TSMC. The United States has repeatedly asked ASML to tighten its restrictions on the export of lithography machines to China, and ASML has done the same. However, American chips have also failed to repay ASML, and even Meguiar has abandoned ASML’s EUV lithography machine. An American chip equipment company has even developed an electron beam lithography machine to try to seize the market of ASML.
While ASML has reduced its revenue from the Chinese market, American chips have actively seized the Chinese market. NVIDIA, Qualcomm and others have customized relevant chips for China and continue to gain revenue from the Chinese market, which naturally makes ASML and other allies quite dissatisfied, so ASML has recently directly spoken.
ASML recently announced its 2022 results at the press conference that it will earn 2.2 billion euros from the Chinese market this year, and it is estimated that it will sell 100 lithography machines to the Chinese market; The senior executives of ASML also expressed their hope to strengthen cooperation with China and warned that it was meaningless for the United States to restrict the supply of lithography machines. China would certainly develop its own advanced lithography machines.
The practice of TSMC and ASML undoubtedly shows that they attach importance to the Chinese market. After all, the development momentum of Chinese chips is quite fierce, the demand for chips in various industries is quite strong, and the chip capacity is expanding rapidly. When the global chip industry enters the recession, the importance of the Chinese market is particularly prominent. In order to survive and develop, it is reasonable for TSMC and ASML to show their favor to Chinese chips.
TSMC and ASML have turned to the Chinese market, which is a showdown to the United States
It can be seen that in the face of such market reality, both TSMC and ASML have begun to compromise with China, hoping to obtain income from the Chinese market and ensure the stability of their performance. Foreign media believe that they have done so as a showdown with the United States. They are no longer willing to follow the lead of the United States, but give priority to benefits, which should be a heavy blow for the United States.