TSMC does not expect direct production impact from China's metal export curbs (updated)

Visual Photonics Epitaxy Co

06/07/2023 04:48

(Recasts, adds details, comments from other companies and
analysts)
       TAIPEI, July 6 (Reuters) - Taiwan's TSMC  2330.TW , the
world's largest contract chipmaker, said on Thursday it does not
expect any direct impact on its production from China's decision
to restrict exports of two metals widely used in semiconductors
and electric vehicles.
    In a move that a top Chinese trade adviser warned was "just
a start," Beijing said on Monday it would limit exports of
products made from the minor metals of gallium and germanium to
protect national security. That followed the U.S. decision to
impose export restrictions to curb China's access to key
technologies used for artificial intelligence.
    Taiwan is a major producer of chips used in everything from
smartphones and cars to fighter jets, supplying companies like
Apple  AAPL.O  and Nvidia  NVDA.O .
    "After evaluation, we do not expect the export restrictions
on raw materials gallium and germanium will have any direct
impact on TSMC's production," Taiwan Semiconductor Manufacturing
Co said in an emailed statement.
    "We will continue to monitor the situation closely," it
added, without elaborating.
    TSMC's Taipei-listed shares extended losses on Thursday,
falling more than 2%, compared with a 1.5% drop on the broader
market  .TWII , in part due to worries about worsening
China-U.S. trade tensions and ahead of U.S. Treasury Secretary
Janet Yellen's visit to Beijing this week.
    "If the talks between the two sides go well, many
restrictions could be loosened, but if the talks go badly, both
sides may put up more sanctions after Yellen goes home," said
Capital Securities Corp analyst Liao Chien-yu.
    Taiwan's WIN Semiconductors  3105.TWO , which uses gallium
for optoelectronic devices, told Reuters only a "small number"
of substrates are purchased from China, with most of its
supplies coming from Germany and Japan.
    China's restrictions will have a very limited impact on the
company's short-term procurement and wafer production and
delivery, WIN added.
        Another Taiwanese firm, Visual Photonics Epitaxy
 2455.TW , told Reuters it also had multiple substrate
suppliers, one of which is U.S. semiconductor wafer maker AXT
 AXTI.O , which said on Monday it would seek permits to keep
exporting gallium and germanium substrate products from China.
    Visual Photonics Epitaxy said it had noticed little effect
so far from China's export restrictions. Its shares were down
more than 4% on Thursday.

 (Reporting by Ben Blanchard; Additional reporting by Roger
Tung; Editing by Tom Hogue and Jamie Freed)
 ((ben.blanchard@thomsonreuters.com;))