Scoop: Republican lawmakers challenge TSMC's Washington clout
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A group of congressional Republicans is urging the U.S. International Trade Commission to enforce U.S. patent rights in a case involving Taiwan Semiconductor Manufacturing Co., according to a letter exclusively obtained by Axios.
Why it matters: This escalates a fight over whether the world's largest chip manufacturer, TSMC, should receive special consideration because of its role in providing the U.S. the chips necessary to stay ahead in the global AI race.
Driving the news: In a May 22 letter, Rep. Ryan Zinke (R-Mont.) and Sens. Tim Sheehy (R-Mont.), Roger Marshall (R-Kan.) and Bernie Moreno (R-Ohio) told ITC Chair Amy Karpel the commission should block imports of foreign-made chips found to infringe U.S. patents.
- They argue strong enforcement protects American competitiveness, and that strategically important companies shouldn't get special treatment.
- TSMC contends it follows the laws in all countries it operates.
Zoom in: The ITC's investigation stems from a complaint brought by Longitude Licensing and Marlin Semiconductor, two Dublin entities under IPValue Management, owned by San Francisco private-equity firm Vector Capital.
- They allege chips made on TSMC's most advanced nodes, the same ones that produce the world's AI accelerators, infringe their patents.
- Marlin acquired those patents from United Microelectronics Corporation, a Taiwanese chipmaker and TSMC rival, in 2021.
- The complaint cites many companies, including Apple and Broadcom, but the epicenter is TSMC, the world's largest chip manufacturer and the primary source for nearly all the silicon entering the U.S. market.
Friction point: This follows an earlier effort from Arizona Democrats including Sens. Ruben Gallego and Mark Kelly and Rep. Greg Stanton, who warned that actions affecting TSMC could disrupt semiconductor production, AI development, defense systems and Arizona's economy.
- One camp argues an exclusion order would hit the supply America is racing to secure.
- The other argues that no company should get a pass because of its strategic weight, and doing so could prevent American companies from ever catching up.
Between the lines: The back and forth is morphing into a test of whether America's dependence on TSMC is starting to influence how policymakers approach disputes involving the company.
Follow the money: TSMC has committed roughly $165 billion to Arizona manufacturing projects, making it a centerpiece of America's semiconductor strategy.
- 75% of TSMC's revenue came from North America last year, according to company filings, and the stock is up 96% year-to-date amid the broader AI boom and a chip supply shortage.
What we're watching: The administrative law judge's initial determination is expected this month, with a full Commission decision around October.
