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Taiwan’s Exclusion from US AI Export Curbs Seen as a Vote of Confidence

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Taiwan’s government expressed confidence on Wednesday after being excluded from the new U.S. restrictions on artificial intelligence (AI) chip and technology exports. The U.S. recently announced tighter controls on AI exports, aiming to maintain dominance in advanced computing technologies within the United States and among its allies.

Details of the New U.S. Export Curbs

The new U.S. regulations, introduced on Monday, limit the export of AI chips to most countries, while maintaining a block on exports to adversarial states such as China, Russia, Iran, and North Korea. However, Taiwan, along with other close U.S. allies, was granted “tier one” status, allowing unlimited access to U.S. AI technology.

Taiwan’s Confidence in Compliance

Taiwan’s Economy Ministry highlighted that the inclusion of the island in the “tier one” category should reassure both local and international stakeholders about the government’s control and adherence to international laws. The ministry emphasized that Taiwan had consistently invited U.S. officials and industry professionals to collaborate with local companies to ensure understanding and compliance with relevant regulations.

Taiwan’s Role in the Global Semiconductor Supply Chain

Taiwan is home to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a key supplier of chips for AI leaders such as Nvidia. The Taiwanese government, mindful of pressure from Beijing—who claims the island as its territory—has established stringent export controls to China and has pledged to enforce U.S. restrictions. In 2023, TSMC halted shipments to the Chinese company Sophgo after one of its chips was found in a Huawei AI processor, which violated U.S. sanctions.

U.S.-China Tensions and Taiwan’s Strategic Position

As tensions continue between the U.S. and China, particularly over AI technologies and national security concerns, Taiwan’s role in the semiconductor supply chain becomes increasingly critical. The island’s exclusion from the U.S. export restrictions reflects its strategic importance and the trust placed in it by the U.S. and other Western nations.

 

TSMC Posts Record Profit, Projects Strong Growth Amid AI Surge

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Taiwan Semiconductor Manufacturing Co. (TSMC) has reported a record quarterly profit, signaling robust demand for chips, particularly those used in artificial intelligence (AI) processing. The world’s largest contract chipmaker posted a 57% increase in net income, reaching T$374.68 billion ($11.4 billion) for the quarter ending December 31, 2024. This performance matched analyst expectations, with revenue climbing 39% year-on-year.

Looking ahead, TSMC is projecting significant revenue growth in the first quarter of 2025, with a forecast of approximately 37% growth, bringing in between $25 billion and $25.8 billion. For the full year, the company expects a revenue increase between 20% and 30%, driven by strong AI demand.

Despite a thriving business, TSMC faces challenges from U.S. technology restrictions targeting China. The Biden administration’s recent announcement of tighter controls on AI chip exports has raised concerns, although TSMC’s CEO, C.C. Wei, expressed confidence that these restrictions would be manageable. Wei noted that the company is applying for special permits for clients affected by these curbs and is optimistic about securing approval.

TSMC is also expanding its global footprint with ongoing construction of new fabrication plants (fabs) in the U.S., Japan, Germany, and Taiwan. The company expects its capital expenditure for 2025 to reach between $38 billion and $42 billion, a potential increase of 41%.

The AI boom has significantly boosted TSMC’s stock, making it Asia’s most valuable company. Its stock price surged 81% last year, outperforming the broader market, which saw a 28.5% gain. On Thursday, ahead of the earnings call, TSMC’s shares rose by 3.8%.

 

Nexperia Parent Wingtech to Sell Electronics Arm Amid Geopolitical Shifts

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Wingtech (600745.SS), the Chinese company that owns European chip maker Nexperia, has announced plans to sell roughly half of its business, focusing more on chipmaking in response to changes in the geopolitical environment. This strategic move follows the company’s recent inclusion on the U.S. government’s “entity list,” which targets firms perceived to aid the Chinese government in acquiring sensitive chipmaking technology.

The sale will involve Wingtech’s “product integration” business, which includes contract manufacturing of smartphones, home appliances, and other electronics. Following the transaction, Wingtech intends to concentrate its efforts on strengthening its semiconductor division and solidifying its position as a leading global player in the power semiconductor sector.

The filing, submitted to the Shanghai Stock Exchange, did not disclose the price of the sale, but it revealed that the business to be sold accounts for between 50% and 60% of Wingtech’s revenues, although it represents no more than half of its total assets. Luxshare Ltd., a Hong Kong-based company that is also the controlling shareholder of Luxshare Precision Industry Co. (002475.SZ), an Apple supplier, will be the buyer of the business.

Nexperia, which Wingtech acquired in 2019, has stated that it does not anticipate any impact on its operations from being placed on the U.S. entity list, though they were not immediately available for comment on the sale.