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TSMC founder warns of chip price hikes caused by the US’ on-shoring efforts

Daniel Nenni

Admin
Staff member

PARTIAL SUPPORT: Morris Chang said he agrees with the US’ goal to slow advances of China’s chip sector, but US policies that might boost chip prices perplex him​

  • By Lisa Wang / Staff Reporter
Washington’s efforts to on-shore semiconductor production might lead to surges in chip prices and supply bottlenecks, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) said yesterday.

The 91-year-old industry veteran said he supports parts of Washington’s effort to slow China’s progress on advanced chip manufacturing.

China is still six years behind Taiwan in making advanced chips, despite years-long efforts to catch up, Chang told a Commonwealth Magazine forum that he coheadlined with Tufts University assistant professor Chris Miller, an expert on the US-China rivalry’s effects on chip manufacturing.

P01-230317-006.jpg

Taiwan Semiconductor Manufacturing Co founder Morris Chang, right, speaks as Tufts University associate professor Chris Miller looks on at an event in Taipei yesterday.​

Photo: Tien Yu-hua, Taipei Times
However, Chang said that other parts of the effort, particularly Washington’s on-shoring and friend-shoring policies, perplexed him.

The US already holds a lion share of 39 percent in the semiconductor sector, including chip manufacturing equipment, chip design and intellectual property, he said.

Washington has excluded Taiwan from its friend-shore list, Chang said, citing US Secretary of Commerce Gina Raimondo as saying that Taiwan is a dangerous place and the US cannot rely on it for chip supply.

"It is, I think, Taiwan's dilemma," Chang said.

However, Raimondo has not made any remarks on the issue since TSMC unveiled plans to set up fabs in the US, with investment totaling US$40 billion, he said.

Chang said he is not sure what the US wishes to achieve through its on-shoring and friend-shoring policies.

“On-shoring is in the name of security and resiliency,” Chang said, adding that even though the defense industry only needs an insignificant amount of chips, the US wants to build large domestic capacity.

The US already has 11 percent share of the world semiconductor manufacturing, he said.

“If you give up the competitive advantages of Taiwan and move to the US ... the costs are going up,” Chang said.

Chang previously estimated that chip manufacturing costs in the US would be 50 percent higher than in Taiwan.

“I found out that was an underestimate. Perhaps, a far worse underestimate than I was underestimated,” Chang said, referring to Miller’s book Chip War: The Fight for the World’s Most Critical Technology, in which the professor writes that Chang is the most underestimated businessperson of the past few decades.

Chipmaking costs in the US could be twice those in Taiwan, Chang said.

“That is going to have some impact on the further expanding ubiquity of the chips. That is one thing I can see. When the costs go up, the ubiquity of chips will either stop, or slow down considerably,” he said, calling chips the most “disinflationary item” of the past six decades.

Taiwan’s competitive advantages in chipmaking are based on its work culture, Chang said, citing his experience working for Texas Instruments Inc in the US from 1958 to 1983.

If a chipmaking tool at a Taiwanese fab breaks at 1am, it is replaced by 2am, he said.

In the US, the same issue would not be solved until the next day, he added.


 
What is his agenda here? Seriously.

Chang previously estimated that chip manufacturing costs in the US would be 50 percent higher than in Taiwan.
“I found out that was an underestimate. Perhaps, a far worse underestimate than I was underestimated,” Chang said, referring to Miller’s book Chip War: The Fight for the World’s Most Critical Technology, in which the professor writes that Chang is the most underestimated businessperson of the past few decades.

Chipmaking costs in the US could be twice those in Taiwan, Chang said.


I did a podcast with Chris Miller:

 
What is his agenda here? Seriously.

Chang previously estimated that chip manufacturing costs in the US would be 50 percent higher than in Taiwan.
“I found out that was an underestimate. Perhaps, a far worse underestimate than I was underestimated,” Chang said, referring to Miller’s book Chip War: The Fight for the World’s Most Critical Technology, in which the professor writes that Chang is the most underestimated businessperson of the past few decades.

Chipmaking costs in the US could be twice those in Taiwan, Chang said.


I did a podcast with Chris Miller:


His agenda? He speaks to F500 people without much comprehension of technology. He wants to spook them, and it seems he is succeeding at that.
 
Sorry, I meant Morris, what is his agenda? Why is he bashing the US like that?

Chris is trying to sell books, I get that. I spoke to him before he went to Taiwan and shared my thoughts on Morris Chang. Morris has always been known for his unfiltered speech. Unfortunately, at his age (91), he should be very careful that facts and his opinions are better aligned.

 
Sorry, I meant Morris, what is his agenda? Why is he bashing the US like that?

Chris is trying to sell books, I get that. I spoke to him before he went to Taiwan and shared my thoughts on Morris Chang. Morris has always been known for his unfiltered speech. Unfortunately, at his age (91), he should be very careful that facts and his opinions are better aligned.

My guess is tsmc is still bargaining how much they can get from ChipAct (highly possible less than they expected). The incentives ChipAct provide is not enough to cover the cost increase for manufacturing in the US.
On the other hand, tsmc would like their US expansion is because they are willing to do but not they are forced to do (pressure from US government).
Since Morris is not working for tsmc now, Morris can say some words that Mark Liu and CC Wei want to say but not convenient to say.
 
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