US Faces Backlash Over 'Semiconductor Confidentiality Demands'... Will They Respond Through Q&A?

Survey Submission Due by the 8th of Next Month... Concerns Raised by Korea, Taiwan, and Others
TSMC Also Opposes... "U.S. Government Preparing FAQ"

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the global semiconductor hegemony competition intensifies, major countries and key companies continue to oppose the U.S. White House's semiconductor industry information requests. The semiconductor industry, which has been asked to provide practically trade secrets such as orders and inventory levels, finds it difficult to respond, and as concerns pour out from various quarters, the Biden administration is reportedly considering distributing a Q&A document soon to address companies' questions.

According to Bloomberg and others on the 11th, the semiconductor industry must complete and submit a questionnaire containing various data to the U.S. White House by the 8th of next month. The U.S. Department of Commerce's Technology Evaluation Office announced on the 24th of last month in the official gazette that it would conduct a survey targeting semiconductor manufacturers and design companies domestically and internationally, as well as companies involved throughout the supply chain including intermediate and final users. According to this, semiconductor companies are required to respond to questions about sales, production, inventory, customers, and more.

South Korea, Taiwan, etc. Convey Concerns to U.S.... TSMC Also Strongly Opposes

Following the U.S. information submission request last month, major countries such as South Korea and Taiwan, as well as semiconductor companies like TSMC, have continued to express opposition. On the 6th, the Ministry of Trade, Industry and Energy announced that Yeohangoo, the head of trade negotiations, held a bilateral meeting with Katherine Tai, U.S. Trade Representative (USTR), at the OECD Ministerial Council held in Paris, France, and conveyed concerns regarding the U.S. government's data submission request for Korean semiconductor companies. The Taiwanese government is also reported to have recently expressed opposition to the U.S. side.

TSMC, the number one foundry company, also voiced opposition to the U.S. government's semiconductor supply chain data request. On the 6th, Sylvia Fang, TSMC's legal affairs head, stated at a press conference, "The U.S. government's supply chain information request involves handing over sensitive information, especially customer information, which is unacceptable," adding, "We are evaluating future response measures." She further said, "The U.S. government recognizes that many companies have questions regarding this and is preparing a Q&A (FAQ) document, which will be announced soon," and added, "We are also waiting for it and will see if the FAQ resolves our concerns."

The reason for the backlash is that the information requested by the U.S. government corresponds to trade secrets of semiconductor companies. In fact, the survey file that the U.S. Department of Commerce's Technology Evaluation Office requested responses for is very detailed. It asked for sales figures for the past three years up to this year, the top three customers per product and the expected sales scale per customer, and lead times for major products. Generally, such information is kept strictly confidential as it can affect transaction price negotiations and customer acquisition.

Screenshot of the survey file requested by the U.S. Department of Commerce's Technology Evaluation Office. (Source: U.S. Department of Commerce Technology Evaluation Office)

Screenshot of the survey file requested by the Technology Evaluation Office of the U.S. Department of Commerce. (Source: Technology Evaluation Office, U.S. Department of Commerce)

Will the U.S. Release a Q&A Document to Clarify Its Position?

If the U.S. government releases a Q&A document in the future, it is expected to be a document that clarifies the U.S. government's position ahead of the submission deadline on the 8th of next month. U.S. Secretary of Commerce Gina Raimondo has stated to foreign media that if companies do not provide information, the government could directly control them under the Defense Production Act (DPA), but she also emphasized that survey responses are 'voluntary,' suggesting that additional opinions may be issued to alleviate some of the companies' concerns.

The U.S. government already issued a Q&A document once on the 25th of last month, the day after the official gazette announcement on the 24th. Through this document, the U.S. government clarified that it seeks to identify specific issues and problems related to the semiconductor supply chain and to secure information to resolve them. It also mentioned that this information request is not repeated annually but is a 'one-time information collection,' and that all corporate confidential information will be protected according to relevant regulations.

A domestic semiconductor industry official said, "Although the government directly conveyed concerns to the U.S., easing the burden somewhat for domestic semiconductor companies such as Samsung Electronics and SK Hynix, the information submission request still remains," adding, "If the U.S. government releases a document regarding this, companies will try to find an appropriate boundary for the information they can disclose based on its contents."

This content was produced with the assistance of AI translation services.