Taiwan still leads the US and China in chipmaking, but it would be difficult for another local company to duplicate the success of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the firm’s founder, Morris Chang (張忠謀), said on Wednesday.
Speaking at a seminar on Taiwan’s competitiveness in chip production, the 89-year-old Chang said that Taiwan’s talent pool of quality engineers, technicians and factory workers is the main reason it has excelled in the semiconductor foundry business.
Another factor is Taiwan’s transportation network, which allows large and quick transfers of personnel in the country, he said at the seminar hosted by the Economic Daily News.
Photo: CNA
Chang, who retired from TSMC in 2018, also lauded the company’s professional managers, saying their leadership and devotion to research and development, coupled with workers’ efforts, and government and local support, had helped TSMC evolve into a world-class company.
The US, on the other hand, saw a decline in manufacturing decades ago, and has been focusing instead on research and development, and the financial sector, he said.
Although the US government has been increasing funding for its semiconductor industry, Chang said that he is not worried, because production costs are significantly higher in the US than in Taiwan.
Short-term federal and state subsidies would do little to reverse the US’ competitive disadvantage in the long term, he said.
China has spent tens of billions of dollars over the past 20 years to nurture its domestic companies, but their semiconductor manufacturing process lags behind TSMC’s by at least five years, and their logic IC design is also one to two years behind that of Taiwan and the US, he added.
Samsung Electronics Co is TSMC’s only strong competitor, because South Korea also has a vibrant manufacturing sector and a competitive talent pool similar to Taiwan’s, he said.
Despite Taiwan’s advantage in the semiconductor industry, it would not be easy for another domestic firm to duplicate TSMC’s role as the world’s leading dedicated semiconductor foundry and a protective shield that underpins Taiwan’s economy, Chang said.
“It will be difficult” to find another company that is so important to the rest of the world and holds such a large global market share and competitive edge, he added.
Founded in 1987 by Chang as a chip foundry business, TSMC has become enormously important, as the global information technology sector is highly dependent on its products.
It has been called a “protective sacred mountain” for Taiwan against China, amid Beijing’s technology dispute with Washington.
Semiconductor wafer manufacturing is extremely important to people’s livelihood, the economy and national defense, Chang said.
Last year, TSMC’s market capitalization topped US$600 billion, the highest among semiconductor companies.
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