Group 1 - TSMC will not use manufacturing equipment from mainland China in its latest 2nm chip production line to avoid angering the US [1] - The decision is influenced by potential US regulations, particularly the "Chip Equipment Act" proposed by US lawmakers, which aims to prohibit companies receiving federal funding from purchasing equipment from "concerned foreign entities," likely including mainland Chinese suppliers [1][2] - TSMC plans to reduce its reliance on mainland Chinese suppliers for chip materials and chemicals in its Taiwan and US operations while deepening cooperation with local suppliers in mainland China to align with local policies [1] Group 2 - TSMC's earlier advanced chip production lines had utilized some equipment from mainland China, but the company aimed to replace this equipment to mitigate regulatory risks as it shifts production to Arizona [2] - The transition to new equipment may lead to increased costs and quality pressures, including higher direct investments, potential supply chain instability, and fluctuations in yield rates affecting chip performance [2] - Mainland Chinese equipment manufacturers may face short-term revenue pressure due to the loss of TSMC orders, but this could drive them to increase R&D investments and develop a more self-sufficient industry ecosystem in the long run [2] Group 3 - Leading mainland Chinese chip manufacturers are increasing the use of domestic equipment and have made significant progress in certain market segments [3] - Companies like Huawei and Unisoc have improved their AI and 5G chip performance, while SMIC is enhancing its mature process and advancing in cutting-edge technology [3] - China Mobile has built the world's largest 400G all-optical inter-provincial backbone network, accelerating the development of high-speed data networks [3]

Core Viewpoint - TSMC is halting the use of chip manufacturing equipment from mainland China in its advanced 2nm chip factory to avoid potential disruptions from U.S. restrictions [1][3] Group 1: TSMC's Production Plans - TSMC's 2nm production line is set to begin mass production this year, starting in Hsinchu City, Taiwan, followed by Kaohsiung City [1] - The company is also constructing a third factory in Arizona, USA, which will eventually produce these advanced chips [1] Group 2: Impact of U.S. Regulations - The decision to stop using mainland Chinese equipment is influenced by a potential U.S. regulation that may prohibit chip manufacturers receiving U.S. funding from using equipment from "foreign entities of concern," interpreted to include mainland China [3] - The proposed Chip EQUIP Act aims to restrict companies benefiting from U.S. federal support from purchasing equipment from these entities [3] Group 3: Supply Chain Strategy - TSMC is investigating all chip manufacturing materials and chemicals used to reduce reliance on mainland Chinese products [3] - The company plans to collaborate more closely with local suppliers in mainland China to enhance supply chain resilience and increase local procurement where possible [3] Group 4: Industry Trends in Mainland China - Leading chip manufacturers in mainland China are increasing the use of domestic equipment, with significant progress in developing local solutions, although lithography equipment remains dominated by ASML [4] - Northern Huachuang, the largest semiconductor equipment manufacturer in mainland China, has risen to become the sixth-largest globally, following major players like ASML and Applied Materials [4] Group 5: TSMC's Procurement Strategy - TSMC emphasizes a global procurement strategy focused on robust risk management and close collaboration with suppliers to develop diversified multi-source supply solutions [4]