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Economy

Taiwan's TSMC denies anti-trust allegations

Small US rival asking EU to investigate key Apple supplier, report says

TAIPEI -- Taiwan Semiconductor Manufacturing Co. on Friday said it is not engaged in anti-competitive practices. The sole supplier of the chips inside Apple's new iPhones came out with the announcement hours after Reuters reported that a small U.S. semiconductor maker is asking European regulators to launch an unfair competition investigation. 

The statement says TSMC has a strict compliance code and that the chipmaker has not taken any steps to interfere with its customers' decisions. 

"Any allegation that TSMC is engaged in anticompetitive practices is baseless," the company said. "What we offer is the best technology and production capabilities." 

The statement goes on to say TSMC has not received any formal notification from any antitrust authorities but that it will collaborate with authorities on requests for information. 

TSMC is the world's largest contract chipmaker by revenue. It also supplies Qualcomm, MediaTek, Nvidia and Huawei. In Europe, TSMC counts Dutch chipmaker NXP as a customer. 

The U.S. company, GlobalFoundries, competes with TSMC in making chips for corporate clients, though it is considered a minor player, lagging Samsung Electronics and Intel as well. 

In an email to the Nikkei Asian Review, GlobalFoundries did not explicitly confirm the Reuters report but said it would support regulatory agencies' probes of the semiconductor industry. 

"We are not surprised that the European Commission is looking into anti-competitive market practices and abusive conduct in the semiconductor sector," a company spokesman said. "The semiconductor industry has a history of being dominated by a few firms."

The spokesman added that TSMC has "a virtual lock" on supply.

He went on: "It's prudent for the regulator to monitor behaviors more closely, and GlobalFoundries will naturally support regulatory agencies as they take a closer look at this key industrial sector for Europe and the world."

The European Commission declined to comment on whether GlobalFoundries had indeed approached the agency. 

"Generally, the Commission monitors possible anticompetitive market practices and abusive conduct," a commission spokesperson said in an email. "This includes behavior by operators active in the semiconductor sector." 

Mark Li, a Hong Kong-based analyst with Sanford C. Bernstein, said the reported probe may become "a distraction" for TSMC. 

TSMC shares shed a bit more than 1%, to NT$218.5, in intraday trading on Friday, but key Asian markets were down due to North Korea's threat to detonate a hydrogen bomb in the Pacific. 

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