Executive Summary
1. One of the most significant impacts of the US-China tech rivalry on TSMC’s revenue was the halt in shipments to Huawei, which began in late Q3 2020. However, TSMC’s revenue from China has recently reached a new high, with Q2 2024 figures not only returning to pre-Huawei levels but even slightly surpassing them. Despite US-led export controls, TSMC remains crucial to global technological innovation, including advancements in Chinese high-performance computing (HPC) products.
2. Bitmain, a leading Chinese IC design enterprise and supplier of cryptocurrency mining machines, has emerged as a significant player aiming to challenge the AI chip market dominance of Nvidia and AMD. In recent quarters, Bitmain has allegedly driven TSMC’s shipment of 3nm chips. Co-founders Micree Zhan and Jihan Wu played crucial roles in Bitmain’s operations, establishing a global company structure and securing significant investments aligned with China’s semiconductor industry strategy. Following the cryptocurrency boom, Bitmain collaborated with local Chinese governments to develop AI chip technology for smart cities.
3. Bitmain’s edge AI chip development progressed through Beijing Jingshi, a company bolstered by the technical expertise of Taiwanese engineers and substantial investments from Chinese entities, including significant backing from Beijing E-hualu and Xiaomi Group. The company’s shareholding structure highlights the collaboration between Taiwanese technology and Chinese capital. Bitmain leverages Taiwan’s semiconductor expertise through a “remote poaching” model, employing Taiwanese engineers at WiseCore Tech for chip design, manufacturing by TSMC and packaging and testing by ASE, all without relocating the engineers. This model provides a prototype for analyzing other instances of Chinese poaching within Taiwan’s semiconductor industry and serves as a reference for the global IC design industry in its efforts to address Chinese technological acquisition efforts.
4. In March 2021, Taiwanese authorities launched an investigation that disrupted Bitmain’s access to Taiwanese AI chip technology, ultimately leading to the dissolution of WiseCore Tech and significant changes in Beijing Jingshi’s ownership. This legal action severed the link between the two companies, reinforcing Taiwan’s economic security framework against unauthorized Chinese investments and technology transfers. However, from a legal standpoint, the investigation primarily focused on Bitmain’s failure to comply with investment review procedures rather than on the protection of specific semiconductor technologies. This situation raises important questions about which home-grown semiconductor technologies should be safeguarded and how unauthorized use by China could harm Taiwan’s national interests. The “remote poaching” model used by Bitmain to transfer Taiwanese R&D expertise and technology underscores the urgent need for Taiwan to strengthen its economic security legal framework. Identifying and regulating key IC design technologies is essential to enhance Taiwan’s ability to manage supply chain security amidst the US-China tech rivalry.
