Paul Gluckman

The U.S.-China competition will be the “geopolitical challenge for this generation,” Cordell Hull, principal at WestExec Advisors, told an online symposium May 5 on Indo-Pacific geopolitics hosted jointly by the Asia programs of the Foreign Policy Research Institute (FPRI) and the Wilson Center. “I certainly hope it can be managed,” and that it “doesn’t lead us into places where neither country really wants to go,” he said.

Taiwan Semiconductor Manufacturing Company believes it’s well-insulated from any disruption in the supply of raw materials due to the war in Ukraine, CEO C.C. Wei said on a Q1 earnings call April 14. TSMC, the world’s largest wafer foundry, “operates a well-established enterprise risk management system to identify and access all relevant risk and proactively implement risk mitigation strategies,” he said. “In terms of material supply, TSMC’s strategy is to continuously develop multi-source supply solutions to build a well-diversified global supplier base and to improve the local supply chain.” For specialty chemicals and gases, including neon -- available in large volumes from Ukraine before the Russian invasion -- “we source from multiple suppliers in different regions, and we have prepared a certain level of inventory stock on hand,” Wei said. “We are also working closely with our suppliers to further strengthen the resilience and the sustainability of our supply chain. Thus, we do not expect any impact on our operations from materials supply.”

Ericsson will record “extraordinary costs” of about 900 million Swedish krona ($94.3 million) from its decision to suspend its “effective business in Russia indefinitely,” CEO Borje Ekholm” said on a Q1 earnings call April 14. When Russia invaded Ukraine Feb. 24, “we realized that our business in Russia could not be sustained, and we suspended all deliveries to Russia already at that point in time,” he said. When the exemption for public telecom networks was removed from the EU’s Russia sanctions on April 10, Ericsson immediately suspended its Russia operations, he said.

The past two years have shown that global supply chains “are very vulnerable,” and especially vulnerable to “external shocks” like pandemics and war, Young Tae Kim, secretary-general of the International Transport Forum, told the World Trade Organization’s Global Supply Chains Forum March 21. “Some vulnerabilities are the result of internal factors as well,” he said.

HP has suspended shipments to Russia “in compliance” with the Biden administration’s sanctions over the Ukraine invasion, CEO Enrique Lores said Feb. 28 on an earnings call about fiscal Q1 ended Jan. 31. “The difficult situation in Ukraine is the latest in a series of global challenges we have faced,” he said.

Q4 revenue at China’s largest chipmaker, Semiconductor Manufacturing International Corporation, jumped 61.1% year over year to $1.58 billion, and its quarterly profit was $552.8 million, increasing 212.7% from Q4 2020, despite being added to the Commerce Department’s Entity List in December 2020 (see 2012180039), the company reported Feb. 10. It was an “exceptional year in SMIC's development history,” it said. The global shortage of chips and the strong demand for “local and indigenous manufacturing” brought SMIC “a rare opportunity,” while the U.S. export restrictions of the entity list “set many obstacles to the Company's development,” it said. “Focusing on the primary task of ensuring operation continuity, meeting customer demand, and alleviating the supply chain shortage, the Company rose to the challenge, tackled difficulties precisely and achieved sound performance.”

There has been “major improvement” in recent weeks to ease congestion across the Port of Los Angeles, “but there’s still so much work to do,” Executive Director Gene Seroka told a Washington Post webinar Dec. 9. The profound shortage of truckers and warehouse labor in Southern California remains a severe problem that won’t ease anytime soon, he said.

The U.S. needs to work with global trading allies to find long-term fixes to the supply chain crisis that will transcend future American administrations, Matt Murray, senior bureau official in the State Department’s Bureau of Economic and Business Affairs, told the Global Trade and Innovation Policy Alliance summit in a keynote Dec. 2. “We can’t just look at supply chain issues and say we need to fix it by Christmas because there are these short-term disruptions,” he said.

The U.S. has “repeatedly stretched the national security concept and abused state power to hobble Chinese companies,” a Chinese Foreign Affairs Ministry spokesperson said last week. The Commerce Department’s Bureau of Industry and Security on Nov. 26 added 27 foreign organizations and individuals to its Entity List, including eight technology entities based in China, to prevent U.S. emerging technologies from being used for Beijing’s “quantum computing efforts that support military applications" (see 2111240014). The BIS action “severely hurts the interests of Chinese companies, recklessly undermines the international trade order and free trade rules, and gravely threatens global industrial and supply chains,” the ministry spokesperson said. “China reserves the right to take necessary countermeasures,” he said. “We will firmly defend Chinese companies’ legitimate rights and interests with all necessary measures.”

Qualcomm supports “targeted and rule-based export controls” as one of several long-term federal policy recommendations for curing the semiconductor shortage, the chipmaker told the Bureau of Industry and Security in comments posted Nov. 10. Washington should “control emerging technologies,” consistent with the 2018 Export Control Reform Act, by imposing targeted and rule-based export controls and avoid disrupting semiconductor supply, especially in legacy node chipsets,” Qualcomm said. “Unilateral controls would only hinder Qualcomm and other U.S. companies from selling in foreign markets, undermining their R&D investments and disadvantaging them against their foreign competitors.” Some international rivals already have “both the technology capability and funding to develop global leadership in these areas,” it said. Submissions to BIS were due Nov. 8 for the agency's September request for information as it prepares a report to the White House on the chip shortage and semiconductor supply chain issues (see 2109230018).