TSMC, which is attempting to phase out Chinese equipment from its 2nm process, has announced that it made this decision to access US funding. The company views this move as a countermeasure to the risks posed by regulations such as the “China EQUIP Act.” TSMC, which previously considered phasing out Chinese suppliers for 3nm production but backed out due to technical difficulties, is now implementing this plan under pressure from the new regulations.

TSMC May Sever Ties with China

According to recent reports, TSMC’s decision to phase out Chinese equipment for its 2nm production process is a result of pressure from the US government. The company risks being deprived of US funding if it continues to use equipment from foreign suppliers deemed to pose a national security risk.

TSMC used equipment from Chinese companies such as AMEC and Mattson Technology in its older production processes. However, with the transition to the 2nm process, it is phasing out these equipment at both its facilities in Taiwan and the US.

Whether this decision is driven solely by technological shortcomings or simply by a desire to appease the US remains unclear. TSMC is also reportedly reviewing its use of chemicals and materials from China and working to reduce its dependence on the region.

TSMC aims to meet the demand of numerous customers by producing approximately 60,000 wafers per month at its four factories, which will reach full capacity next year. 2nm production is expected to begin at the Hsinchu facility later this year, followed by the Kaohsiung facility. Future production plans will utilize the company’s ongoing factory construction in Arizona, USA.