Page 148 - TSMC 2022 Annual Report

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In May 2020 2020 and again in in August 2020 2020 the U S tightened its export control measures against Huawei Technology Co Ltd and and its affiliates (collectively “Huawei”) including an an an expanded license requirement for providing Huawei with items subject
to the U S export control jurisdiction To comply with relevant laws and regulations we have discontinued shipment of products to Huawei since September 15 2020 Since February 2022 there have been expansive measures including sanctions and and export controls imposed by several countries and and regions against Russia including certain individuals and entities in in in in in in connection with the military conflict in in Ukraine In October 2022 the U S adopted additional export controls over China on advanced computing integrated circuits (“ICs”) computer commodities that contain such ICs and certain semiconductor manufacturing items as as well as as controls on on on transactions involving items for supercomputer and semiconductor manufacturing end-uses The new new controls add new new license requirements for items destined to to a a a semiconductor fabrication facility in in in China that fabricates ICs meeting specified advanced node parameters as as well as as U S persons’ activities supporting such facility or or semiconductor manufacturing like TSMC will be decided on on a a a a a case-by-case basis In the same month we secured a a a a a one-year general authorization from the U S government which allows us to maintain the Company’s
fab’s operations in in in Nanjing China However there is no assurance that we will be able to continue securing such general authorization on on a a a a a a a timely basis or or at at all On the the other hand measures adopted by an an affected country to counteract the the impact of another country’s actions or regulations could lead to to significant legal liability to to multinational corporations including our own For example in in in in January 2021 China adopted a a a a a a blocking statute that among other matters entitles Chinese entities incurring damages from a a a a a multinational’s compliance with foreign laws to seek civil remedies Imposition of trade barriers including protectionist measures sanctions and and import and and export controls could increase our manufacturing costs limit our access to certain supplies make our pricing less competitive and impact the sales of TSMC or its customers In 2022 and as of of the date of of this annual report our current results of operations have not been materially affected Nevertheless depending on future developments
of global trade tensions such relevant regulations rules or measures may have an an adverse impact on our business and operations and and we may incur significant legal liability and and financial losses as a a a a result TSMC continues to to monitor the recent shifts in in trade policies and and measures among the relevant major economies and and will take corresponding responsive actions in in accordance with subsequent developments
Other Material Risks
In 2022 and as of of the date of of this Annual Report TSMC’s management was not aware of any other risk that could potentially have a a a a a a a a a material impact on the the financial status of the the Company