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[News] Trump’s Tariff Storm Spurs Taiwan’s ASIC Firms to Seek Refuge in the U.S. Market
As Trump threatens to impose new tariffs on countries like Mexico, Canada and China, the storm is gradually impacting upstream players in the semiconductor industry. According to Commercial Times, Taiwan’s electronic manufacturing services (EMS) industry begins to feel headwinds, as ASIC companies, including TSMC’s ally Global Unichip Corporation (GUC) and Alchip, are shifting their operational focus toward major European and American clients.
According to a previous report by Reuters, the U.S. Department of Commerce may announce two major bans as early as November 28, before Thanksgiving. These measures could potentially impact up to 200 Chinese chip companies, limiting their import of U.S. goods, while another set of rules restricting the export of HBM chips to China is anticipated to be revealed next month.
GUC Boosted by Demand from U.S. Cryptocurrency
In terms of the impact on Taiwanese ASIC (Application-Specific Integrated Circuit) firms, the Commercial Times report notes that the restrictions have limited effect on GUC.
GUC’s major Chinese clients, according to the report, primarily focus on mature processes and consumer applications, which would not be the target of the U.S. chip ban aiming at AI and HPC. GUC also notes and it has no HBM-related customers in that region currently.
In the first ninth months of 2024, China is still GUC’s largest market, accounting for 33% of its revenue, according the company’s website, following by the U.S. (29%) and Japan (15%).
However, GUC is seeing more opportunities from the U.S. The report adds that GUC has benefited in the second half of this year from favorable trends in the cryptocurrency market, with clear demand from North American customers, which would potentially boost the region’s revenue contributions further next year.
Moreover, as AMD and NVIDIA are already collaborating with major CSP companies to develop HBM4, the report notes that GUC already has customers with potential tape-out projects, making next year’s performance highly promising.
According to its press release, GUC’s 3nm HBM3E Controller and PHY IP have been adopted by a major cloud service provider and several high-performance computing (HPC) companies. The cutting-edge ASIC is expected to tape out this year, featuring the latest 9.2Gbps HBM3E memory technology.
Alchip: China’s Contribution Relatively Low
On the other hand, Alchip also noted that its revenue from the Chinese market is relatively low, and there is no need to take unnecessary risks, according to Commercial Times. According to the report, Alchip estimates that only 10% of its revenue this year will come from China.
The company is reportedly focusing on developing partnerships with Chinese EV manufacturers, as the automotive industry is generally less politically sensitive.
At the same time, Commercial Times notes that Alchip is actively pursuing orders from U.S.-based clients and has identified new opportunities in the North American CSP (cloud service provider) market. According to the company, most CSP projects are currently dominated by Broadcom, but some clients are concerned about over-consolidation, providing Alchip with a chance to enter the competition.
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(Photo credit: GUC)
