TSMC Under Attack from a Patent Troll, but U.S. Republicans Demand Chip Import Ban
TSMC finds itself at the center of a controversy in the United States that pits intellectual property protection against semiconductor supply chain security and the strategic interests related to the development of artificial intelligence. A group of Republican lawmakers has urged the U.S. International Trade Commission (ITC) to maintain a strict line in the enforcement of patent laws, without granting preferential treatment to the world's leading advanced semiconductor manufacturer.
According to Axios, in a letter addressed to ITC Chair Amy Karpel, Representative Ryan Zinke and Senators Tim Sheehy, Roger Marshall, and Bernie Moreno argued that any chips produced abroad and deemed to violate U.S. patents should be excluded from the American market. According to the signers, the strategic importance of a company should not influence the enforcement of intellectual property laws, as effective patent protection is an essential element for the technological competitiveness of the United States.
The investigation originates from a complaint filed by Longitude Licensing and Marlin Semiconductor, two Irish firms operating under the control of IPValue Management. The latter was owned, until a few months ago, by the Vector Capital fund and has recently been acquired by Fortress Investment Group, a company often associated with the monetization and enhancement of patent portfolios.
The allegations concern several patents acquired in 2021 from United Microelectronics Corporation (UMC), a Taiwanese competitor of TSMC. According to the complainants, the technologies used in TSMC's advanced manufacturing processes, including those used to produce accelerators intended for artificial intelligence, would violate intellectual property rights associated with these patents.
The proceedings also formally involve other companies in the sector, including Apple and Broadcom, but the main focus remains on TSMC. The Taiwanese company holds a dominant position in the global production of advanced semiconductors and is an essential source for a large portion of the chips that reach the U.S. market.
The issue has already taken on a political dimension. In recent months, some Democratic representatives from Arizona, including Senators Ruben Gallego and Mark Kelly and Representative Greg Stanton, have expressed concern about the potential consequences of restrictive measures against TSMC. According to this line of thinking, an import exclusion order could compromise semiconductor production, slow down the development of artificial intelligence, affect defense systems, and have economic repercussions on the state of Arizona, where TSMC is heavily investing.
The Taiwanese company has announced investments of around $165 billion in the United States, with a strong concentration in Arizona, becoming a central element of the American strategy aimed at strengthening domestic semiconductor production. At the same time, approximately 75% of TSMC's revenue comes from the North American market, highlighting the strong economic ties between the company and the United States.
On the international front, Taiwan's Ministry of Economic Affairs has already expressed its support for TSMC. For its part, the company has always maintained that it operates in compliance with the regulations in the countries where it operates.
The controversy could thus become an important test to assess how far the United States' dependence on TSMC's manufacturing capacity may influence the decisions of American institutions. The ITC is expected to publish a preliminary assessment in the coming weeks, while the final decision from the Commission is anticipated around October. Only afterward could a potential actual legal dispute arise.