MARIA: JOINING ME RIGHT NOW A

FOX BUSINESS EXCLUSIVE IS

COMMERCE SECRETARY WILBUR ROSS,

MR. SECRETARY, GOOD TO SEE YOU,

THANK YOU SO MUCH IF BEING HERE.

>> GOOD TO SEE YOU, MARIA.

MARIA: LET'S TALK ABOUT THE

CHANGE IN RELATIONSHIP WITH

CHINA AND THIS MOVE TO GET -- TO

GET SUPPLY CHAINS HERE.

WHAT ARE YOU GOING TO NEED TO DO

TO GET COMPANIES TO MOVE SUPPLY

CHAINS OUT OF CHINA SO THE

COUNTRY IS NOT SO RELIANT ON

FOREIGNERS TO MAKE THE VERY

IMPORTANT THINGS LIKE WE NEED

LIKE PRESCRIPTION DRUGS?

>> WELL, REMEMBER, THE

SEMICONDUCTOR WAS INVENTED IN

THE UNITED STATES, BUT SINCE

1987, TSMC, TAIWAN SEMICONDUCTOR

MANUFACTURING COMPANY, HAS BEEN

THE LEADER IN IT AND RIGHT NOW

THEY ARE AT THE CUTTING EDGE OF

TECHNOLOGY.

THE WAY YOU MEASURE TECHNOLOGY

IN SEMICONDUCTORS IS BY HOW MANY

NANO METERS AND SIZE THE CHIP

IS. COMMODITY SEMICONDUCTORS ARE UP

COMMODITY SEMICONDUCTORS ARE UP

AROUND THE 11 NANO METERS AND IT

HAD BEEN AROUND 7NANO METERS.

IT WOULD BE 5NANO METERS AND IT

WOULD MAKE IT CUTTING EDGE AND

THAT'S WHAT MAKES IT SO

SIGNIFICANT.

THE SMALLER THE NUMBER OF NANO

METERS THE MORE POWERFUL THE

CHIP CAN BE SO THIS WOULD BE A

BLOCKBUSTER OF A CHIP.

MARIA: HOW DID YOU GET THEM TO

DO THIS IN ARIZONA, REALLY WHAT

I'M ASKING, ARE YOU GOING TO

NEED TO COME UP WITH A TAX

INCENTIVE TO GET COMPANIES TO

UNDERSTOOD DO, UNRAVEL WHAT

THEY'VE GOT, THE INFRASTRUCTURE

THEY'VE GOT PERHAPS IN CHINA AND

MOVE IT TO THE UNITED STATES,

WHAT'S THE INCENTIVE TO DO THIS?

I'M WONDERING HOW REALISTIC IT

IS TO MOVE THE SUPPLY CHAINS.

>> WELL, TSMC THINKS IT'S

REALISTIC ENOUGH TO MAKE THE

ANNOUNCEMENT.

MARIA: WAS THERE AN INCENTIVE TO

GET THEM TO DO THAT?

>> SURELY, THE STATE AS NORMALLY

WOULD AS PROVIDING SOME RELIEF,

SOME OF THE IMPEDIMENTS THAT

OTHERWISE MIGHT HAVE PREVENTED

THEM FROM DOING SO, BUT THE MOST

IMPORTANT THING ABOUT THE TMC IS

TWO THINGS, ONE IS THAT THEY

HOPE TO BRING THEIR SUPPLY CHAIN

WITH THEM.

THERE ARE ABOUT 80 KEY SUPPLIERS

TO TSMC AND WE ARE VERY --

MARIA: THAT'S VERY IMPORTANT,

YES.

>> BECAUSE THEN WE WILL HAVE A

VERTICAL INTEGRATION AND ARIZONA

SINCE IT ALREADY HAS INTEL,

ALREADY HAS ON SEMICONDUCTOR

WILL NOW HAVE A VERY POWERFUL

TECHNOLOGY COMPLEX THAT WE HOPE

WILL BE VERY VERTICALLY

INTEGRATED AND THAT SHOULD

FACILITATE EVEN MORE ACTIVITY.

WE ARE BUILDING A REAL

SEMICONDUCTOR ECHO TECH.

MARIA: THAT'S TERRIFIC, AND TO

SEE IT IN ARIZONA IS ALSO REALLY

INTERESTING.

I WANT TO GET TO THE BREAKING

NEWS THIS MORNING.

SECRETARY OF THE COMMERCE

DEPARTMENT IS NOUNSING THAT IT

WILL AMEND ITS FOREIGN DIRECT

PRODUCT RULE AND THE ENTITY LIST

TO TARGET HAUWEI AND HAUWEI'S

ACQUISITION AND EARLIER THIS

MORNING THE DEPARTMENT IS

EXTENDING LICENSE AUTHORIZATION

OF HAUWEI TECHNOLOGY FOR ANOTHER

90 DAYS AND YOU'RE ALSO WARNING

FOR THOSE BENEFITING SHOULD

PREPARE FOR LICENSE TO EXPIRE IN

AUGUST.

WALK US THROUGH THIS AND HOW

WOULD THIS PROTECT AMERICAN

TECHNOLOGY AND JOBS AND GIVE US

THE SENSE OF THE ISSUES AROUND

HAUWEI, SECRETARY?

>> SURE, THAT HAS BEEN A VERY

HIGHLY TECHNICALLY LOOPHOLE

THROUGH WHICH HAUWEI HAS BEEN

ABLE, IN EFFECT, ABLE TO USE

TECHNOLOGY WITH PRODUCERS.

FOREIGN DIRECT PRODUCT IS A

HIGHLY TAILORED THING TO TRY TO

CORRECT THE LOOPHOLE AND MAKE

SURE THAT THE AMERICAN FOUNDRIES

ARE COMPETING ON EQUAL FOOTING

WITH THE FOREIGN ONES.

THAT'S QUITE SEPARATE FROM THE

TSMC DEVELOPMENT WE JUST TALKED

ABOUT.

AND WE BELIEVE THAT WILL HAVE A

--

MARIA: YEAH.

>> THAT WILL HAVE A VERY

POWERFUL IMPACT BECAUSE WE NEVER

INTENDED THAT LOOPHOLE TO BE

THERE.

THE OTHER ONE ABOUT THE

EXTENSION AND THE 90 DAYS, WE

HAVE MADE EXTENSIONS MAINLY TO

MAKE SURE THAT THE RURAL

TELECOMS HAVE PLENTY OF TIME IN

ORDER TO WEAN THEMSELVES FROM

THE HAUWEI EQUIPMENT.

YOU'RE AWARE OF THE FCC HAS COME

OUT AGAINST USE OF HAUWEI AND

SPECIFICALLY BANNING USE OF

FEDERAL FUNDS TO PUT HAUWEI

EQUIPMENT INTO THE RURAL

TELECOM, BUT THEY ALSO NEEDED

FOR MAINTENANCE AND FOR UPGRADE,

SO WE ARE VERY PLEASED THAT

CONGRESS HAS APPROPRIATED

$1 BILLION TO HELP THE RURAL

TELECOMS TO WEAN THEMSELVES AND

YET WE ARE GIVING THEM ANOTHER

EXTENSION, WE WANT THEM TO MAKE

CLEAR TO US DURING EXTENSION IN

MID-AUGUST WHAT THEY ARE DOING

TO WEAN THEMSELVES FROM HAUWEI,

SO 3 UNRELATED DEVELOPMENTS THAT

JUST HAPPENED TO COME OUT IN THE

SAME DAY.

MARIA: WELL, THIS IS A REALLY

IMPORTANT DEVELOPMENT AND

SECRETARY POMPEO HAS TOLD ME

THAT HAUWEI ACCESS AN ARM OF THE

CHINESE COMMUNIST GOVERNMENT IN

TERMS OF SURVEILLANCE BECAUSE

THERE ARE BACK DOORS IN HAUWEI

EQUIPMENT YOU DATA GOES RIGHT

BACK TO THE COMMUNIST

GOVERNMENT, SO PEOPLE ARE

WONDERING IF COMPANIES

UNDERSTAND THE THREAT.

SOUNDS LIKE YOU ARE