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TSMC's clients include Huawei's chip division HiSilicon.
However, the U.S. blacklisting of Huawei over security concerns
and trade disputes with China has left the world's biggest
contract chipmaker exposed to diplomatic developments between
two countries where it also has production bases.
The company last month unveiled plans for a $12 billion plant in
the United States just hours before the U.S. Commerce Department
outlined a proposal to amend chip export rules - a move that
would restrict TSMC's sales to Huawei.
The amendment would require licences for sales of semiconductors
made abroad with U.S. technology to Huawei, the world's biggest
supplier of telecommunications equipment and second-largest
smartphone maker.
Asked at an annual general meeting whether TSMC could fill the
order gap left by HiSilicon if the amendment is adopted, TSMC
Chairman Mark Liu said, "We hope that won't happen".
"But if it does, we will replace it in a very short time," he
said in the northern Taiwanese city of Hsinchu, where the Apple
Inc <AAPL.O> and Qualcomm Inc <QCOM.O> supplier is based.
"It's difficult for me to predict how fast it could be filled
immediately."
Liu said TSMC is watching how the rules are implemented and is
"still studying" what they mean for the company. He said TSMC
does not rule out the possibility of applying for an exemption.
Analysts estimate TSMC generates around 60% of revenue from the
United States and 20% from China.
TSMC is not the only company impacted by Sino-U.S. tension, Liu
said.
"Please be reassured. We will find a solution," he said,
answering a shareholder question on concerns about any impact on
TSMC. "We will overcome the challenges one by one."
TSMC's U.S. investment plan is "definitely in line with" the
company's interests, and will help the firm gain the trust of
clients and boost its talent pool, Liu said.
TSMC is still in talks with the U.S. government about subsidies
for its new plant to make up for cost differences between Taiwan
and the United States, and while the plant will not have direct
dealings with the military, some clients might be military
suppliers, he said.
Liu was upbeat on overall tech demand, even as the coronavirus
outbreak has ravaged the global economy.
"Everyone can see that iPhone sales are still pretty good."
(Reporting by Yimou Lee; Writing by Ben Blanchard; Editing by
Muralikumar Anantharaman and Christopher Cushing)
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