Analysis: TSMC-Intel Probe and Taiwan's Silicon Shield

TaiwanPlus News

The TSMC-Intel trade secrets probe highlights how technology security debates are increasingly about people, not just hardware and export controls. That's according to Olivia Shen, director of strategic technologies at the United States Studies Centre at the University of Sydney. In an interview with TaiwanPlus, Shen discusses the fusion of national security and business, the potential friction such cases could cause in US-Taiwan relations and the future of talent mobility in critical industries like semiconductors.

Transcript

00:00Olivia, the stakes in this case seem to be quite high. It involves TSMC and Intel,

00:05the biggest chip makers in Taiwan and the US, and involving the most advanced tech

00:11in the industry. So things are moving very quickly, but when you look at this

00:14case, what's your main takeaway? My main takeaway is that this is such an

00:19interesting case that highlights how technology security is at the absolute

00:23forefront of people's minds right now. Now we've spoken a lot about sort of the

00:27kind of export controls and other levers that you can use to control the access

00:32to the physical hardware and the infrastructure, but the most difficult

00:36thing to control is in fact people. Now this case comes at a very sensitive time

00:40in US-Taiwan relations. The two countries are negotiating a trade deal, which is

00:46reported to involve many aspects related to the semiconductor industry, especially

00:51as the US attempts to bolster its domestic chip capacity. Do you think that cases

00:57like this could create some friction in that relationship? It's probably going

01:01to be a source of friction, no doubt. We have to factor in that TSMC and Intel,

01:07they are partners, but they are also competitors. So TSMC is an absolute

01:13indisputed titan of producing advanced semiconductors at five nanometers and

01:18below. Intel is trying to capture a part of that market, but they have been quite

01:23laggard in their progress in achieving that market share. There's a big question mark

01:28around how long Taiwan and TSMC's silicon shield will hold, right? And the only the

01:35power of that silicon shield is only as good as the exclusivity of the

01:40technology and the IP that TSMC holds as well. You've already seen just this year,

01:47Taiwan use its national security laws to indict three former other former TSMC

01:53employees for leaking trade secrets to a Japanese company, Tokyo Electron, I believe.

01:59And this is probably a sign of things to come. And finally, Olivia, what do you think

02:05that this case and cases like it tell us about the state of global chip competition

02:09at this moment? I think what's really interesting to me is how these commercial

02:15decisions and national security decisions are becoming increasingly fused. We've seen

02:21that trend over the past couple of years already. But now it's really getting down

02:25to brass tacks of not just controlling supply chains, or specific foundries, but

02:32now also specific people and the actions of individual employees within an

02:36organisation. I do wonder where this is going to head. Are we going to be doing a lot of

02:43investigations authorised under departments of commerce into specific entities, specific

02:49senior executives? What does that mean for an overall innovation ecosystem, where

02:54traditionally, some of these players and some of these people do move very freely

02:59between companies? Yes, it is often under the auspices of some sort of non

03:03disclosure or non complete clause. But this is now looking at it from a very, very

03:09specific national security, national interest lens. And I wonder about how many

03:14people are going to be wrapped up in this continuing trend.

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