| Hi all, this is Debby in Taipei. Taiwan's biggest company casts an ever-growing shadow over the world's most important electronics. But first... Three things you need to know today: • China's DJI is suing the US DOJ over designating it as a military firm
• Apple's top recruiter is departing, adding to HR team upheaval
• The US is pressuring Japan to elevate export curbs on China Taiwan Semiconductor Manufacturing Co. is the world's biggest chipmaker and the sole provider of Apple Inc. and Nvidia Corp.'s most prized chips. According to an analyst's question during its latest earnings call, it could soon face antitrust concerns over that dominance. On Thursday, Charlie Chan of Morgan Stanley asked TSMC's top executives how they might "handle the potential antitrust risk, given your near monopoly." Charlie's "a little bit concerned, same as other investors." He popped his question toward the end of a mostly upbeat discussion, focused on the strength of TSMC's burgeoning Nvidia business and a semiconductor recovery. Executives seemed prepared. Their response: something called Foundry 2.0. That concept emerged this year as TSMC extended its lead over rivals in the business of making the world's most advanced semiconductors. Asia's most valuable company cemented that advantage in past months as Intel Corp. cut jobs and pulled back on expansion, while Samsung Electronics Co. struggled to make headway in AI memory. Then around July, Chief Executive Officer C.C. Wei unexpectedly unveiled the concept of Foundry 2.0 — in which TSMC's competitive advantage is weighed against a far wider range of rivals than just Intel and Samsung. Version 2.0 of the foundry business does far more than make chips for customers — it also designs, packages and helps sell those components. Viewed through this lens, TSMC has only about a 30% share of the market it's trying to compete in, according to Wei's response to Chan. But, and here's the reason for Chan's query, many see TSMC owning almost the entire market for cutting-edge semiconductors. Just take a look around: the AI chips that have made Nvidia a $3.4 trillion company, the Apple Silicon that powers every iPhone, and the vast majority of Qualcomm Inc.'s best Snapdragon chips all come from TSMC fabs. Samsung hasn't been able to claw these top customers away, while Intel is on the precipice of a total overhaul that may see it sold off in parts. "I think Foundry 2.0 is a better reflection of TSMC's addressable market," Wei said. TSMC is "not dominant yet. We are big, yes, because we performed very well. But no, it's not a kind of antitrust concern. It's not in our picture actually." Nobody likes to be called a monopoly, but the Hsinchu-based company is only joining its biggest customers in hearing that concern. Apple faces such challenges all over the world, while Nvidia recently also drew the attention of US antitrust regulators. This is how life is in the trillion-dollar valuation club, and TSMC's ADRs today trade at such lofty levels. It was a decade ago that TSMC surpassed the 50% mark of the original foundry market, which coincided with the start of its iPhone processor production. Being a foundry has long been a deliberately low-profile job — you convert orders into integrated circuits, and the less fuss you do it with, the more orders you're likely to get. Since then, the company has steadily controlled more than half of the world's contract chipmaking market, according to its annual reports and estimates by industry researchers. That dominance was questioned by rival GlobalFoundries in 2017, when it reportedly asked European Union antitrust regulators to look into TSMC. But we never saw any escalation as the two companies reached agreement on a series of disputes not long after. In recent years, TSMC has refrained from specifying its share of the global foundry business. But earlier this year, TSMC Senior Vice President Kevin Zhang revealed that 99% of the world's AI accelerators are made with the company's advanced technology. You can read the names of Nvidia and nearest rival Advanced Micro Devices Inc. into those comments, even if Zhang didn't specify them. But there is a reason for this dominance. Nvidia CEO Jensen Huang put it succinctly at a Goldman Sachs event in mid-September. "We're fabbing at TSMC because it's the world's best. And it's the world's best not by a small margin, it's the world's best by an incredible margin," Huang said.—Debby Wu Some three billion people in the developing world still can't access the internet. In five years, at least a billion of them will arrive online for the first time, thanks in large part to new technologies being developed in Silicon Valley and elsewhere. How will these new users embrace the internet to transform their lives, and what will it mean for the rest of the world? Taiwan is open to using nuclear tech to power companies like TSMC. AI startup SandboxAQ, which spun off from Alphabet, is seeking to raise new funds at a valuation of more than $5 billion. A global watchdog that combats money laundering said it'll dedicate greater attention to wealthy nations in the years ahead. | 
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