Taiwan says its chip firms will adhere to new US rules blacklisting China supercomputing entities (updated)

Alchip Technologies

14/04/2021 06:54

(Updates TSMC stock price movement)
    TAIPEI, April 14 (Reuters) - Taiwan said on Wednesday its
chip companies will adhere to U.S. rules after Washington added
seven Chinese supercomputing entities last week to an economic
blacklist and after a Taipei-based chipmaker halted orders from
one of the entities named.
    The U.S. Commerce Department said the seven Chinese entities
were "involved with building supercomputers used by China's
military actors, its destabilizing military modernisation
efforts, and/or weapons of mass destruction programs."
    Companies or others listed on the U.S. Entity List are
required to apply for licenses from the Commerce Department that
face tough scrutiny when they seek permission to receive items
from U.S. suppliers.  urn:newsml:reuters.com:*:nL1N2M1163
    Tech-powerhouse Taiwan's firms are major suppliers of
semiconductors globally, and Economy Minister Wang Mei-hua said
they would follow Taiwanese and U.S. rules.
    "Our companies, whether producers or exporters, must accord
with our country's rules. Of course the United States has new
rules, and our companies will pay attention and accord with the
key criteria of the U.S. rules," she told reporters.
    The U.S. move came amid its rising tensions with China over
Taiwan. China has never renounced the use of force to bring the
democratically ruled island under its control.  urn:newsml:reuters.com:*:nL1N2M60FO
    It also came amid a global shortage of semiconductors that
has thrust Taiwan centre-stage into the technology supply-chain.
    On Tuesday, Taiwan's Alchip Technologies Ltd  3661.TW  said
it had stopped production for all products related to Tianjin
Phytium Information Technology, which is on the new U.S. list.
    Alchip, which said 39% of its revenue last year came from
Phytium, added that it was collecting "detailed documents for
our U.S. counsel to determine if the products are subject to EAR
(Export Administration Regulations)".
    A U.S. Bureau of Industry and Security "permit will be
obtained for Phytium's products if necessary", it added.
    Its share price tumbled 9.9% on Wednesday, bringing losses
to more than a third of the shares' value since the Commerce
Department's announcement last week.
    Separately, Hong Kong's South China Morning Post reported
that Taiwan Semiconductor Manufacturing Company Co Ltd (TSMC)
 2330.TW   TSM.N , the world's largest contract chipmaker, has
suspended new orders from Phytium.
    TSMC said it could not confirm the report, and declined
further comment.
    TSMC shares closed up 1.16% on Wednesday, outperforming a
0.24% rise in the broader Taiwanese stock market  .TWII .

 (Reporting by Ben Blanchard; Editing by Muralikumar
Anantharaman and Christopher Cushing)
 ((ben.blanchard@thomsonreuters.com;))