According to Reuters, semiconductor manufacturer TSMC stated that it does not anticipate any immediate impact from the export restrictions recently announced by China. The restrictions specifically target gallium and germanium, which are used in the production of semiconductors.
TSMC assured that it is closely monitoring the situation. The company stated, “Based on our evaluation, we do not expect the export restrictions on gallium and germanium raw materials to have direct implications for TSMC’s production.” However, the wording of their statement suggests that there could potentially be long-term consequences for TSMC.
China announced the export restrictions on gallium and germanium earlier this week, emphasizing that these limitations are just the beginning. Over 97 percent of gallium and germanium resources are sourced from China.
These export restrictions are in response to recent geopolitical trade limitations, primarily led by the United States. Many advanced chips and chip manufacturing machines are no longer allowed to be exported to China and Russia, as the U.S. argues that these technologies could have potential military applications. Furthermore, at the end of June, the Netherlands introduced a permit requirement for the export of semiconductor production equipment, which is intended to be “neutral” in terms of countries involved. Consequently, certain machines manufactured by ASML cannot be exported without a permit.
Oliver I. Kjeldsen has a corporate finance and extensive expertise in company audit. He grants us amazing insights on taxation, international affairs and friendly advice on nearly any topic of interest. His email is oliver.kjeldsen@economicinform.com
