The US’ efforts to increase onshore manufacturing of semiconductors is wasteful and an expensive exercise in futility due to a lack of manufacturing talent and high costs, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) said on Tuesday.
Chang made the remarks in an interview with the Brookings Institution in its latest podcast on the theme “Can semiconductor manufacturing return to the US?”
The semiconductor veteran said that the US today still has a good position in the semiconductor technology industry in terms of chip design capacity, but it lacks sufficient manufacturing talent.
Photo: Reuters
“I don’t really think it is a bad thing for the US actually. But, it’s a bad thing for trying to do semi manufacturing in the US,” Chang said.
The US used to have strong talent, like Taiwan does now, he said.
However, after the 1970s, young talent in the US migrated to high-paying professions such as finance or consulting, rather than working for technology companies such as GE or IBM, he said.
Since then, US companies just could not get enough business school graduates, he added.
Another challenge is high manufacturing costs, Chang said.
For example, TSMC thought that its factory in Oregon, which was established in 1997, would have costs comparable to Taiwan, but that assumption was proved to be “naive,” he said.
TSMC has attempted to improve the factory’s performance by changing managers and engineers, he said.
While a few years of effort did improve the factory’s performance, the difference in cost between the US and Taiwan remains almost the same, he added.
Chips made at the Oregon factory cost 50 percent more than those make TSMC’s factories in Taiwan, Chang said.
Regarding TSMC’s new US$12 billion factory in Arizona, Chang said he had retired by 2019, but that chairman Mark Liu (劉德音) made the decision at the insistence of the US government.
TSMC, the sole chip supplier for Apple Inc’s iPhones, has said the Arizona factory is under construction, but aims to manufacture 5-nanometer chips by 2024.
Commenting on the US government’s efforts to increase onshore chip manufacturing by spending tens of billions dollars, Chang said: “I think it will be a very expensive exercise in futility.”
“The US will increase onshore manufacturing of semiconductors somewhat,” Chang said. “All that will be at a very high cost increase, high unit costs, but non-competitive in the world market when you compete with factories like TSMC.”
Regarding Intel CEO Pat Gelsinger’s remarks that “Taiwan is not safe,” Chang said he assumes that there will not be a war.
“If there is no war, then I think the efforts to increase onshore manufacturing of semiconductors is a wasteful and expensive exercise in futility," he said. “If there is a war, we all have a lot more than just chips to worry about.”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) secured a record 70.2 percent share of the global foundry business in the second quarter, up from 67.6 percent the previous quarter, and continued widening its lead over second-placed Samsung Electronics Co, TrendForce Corp (集邦科技) said on Monday. TSMC posted US$30.24 billion in sales in the April-to-June period, up 18.5 percent from the previous quarter, driven by major smartphone customers entering their ramp-up cycle and robust demand for artificial intelligence chips, laptops and PCs, which boosted wafer shipments and average selling prices, TrendForce said in a report. Samsung’s sales also grew in the second quarter, up
On Tuesday, US President Donald Trump weighed in on a pressing national issue: The rebranding of a restaurant chain. Last week, Cracker Barrel, a Tennessee company whose nationwide locations lean heavily on a cozy, old-timey aesthetic — “rocking chairs on the porch, a warm fire in the hearth, peg games on the table” — announced it was updating its logo. Uncle Herschel, the man who once appeared next to the letters with a barrel, was gone. It sparked ire on the right, with Donald Trump Jr leading a charge against the rebranding: “WTF is wrong with Cracker Barrel?!” Later, Trump Sr weighed
HEADWINDS: Upfront investment is unavoidable in the merger, but cost savings would materialize over time, TS Financial Holding Co president Welch Lin said TS Financial Holding Co (台新新光金控) said it would take about two years before the benefits of its merger with Shin Kong Financial Holding Co (新光金控) become evident, as the group prioritizes the consolidation of its major subsidiaries. “The group’s priority is to complete the consolidation of different subsidiaries,” Welch Lin (林維俊), president of the nation’s fourth-largest financial conglomerate by assets, told reporters during its first earnings briefing since the merger took effect on July 24. The asset management units are scheduled to merge in November, followed by life insurance in January next year and securities operations in April, Lin said. Banking integration,
LOOPHOLES: The move is to end a break that was aiding foreign producers without any similar benefit for US manufacturers, the US Department of Commerce said US President Donald Trump’s administration would make it harder for Samsung Electronics Co and SK Hynix Inc to ship critical equipment to their chipmaking operations in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market. The US Department of Commerce in a notice published on Friday said that it was revoking waivers for Samsung and SK Hynix to use US technologies in their Chinese operations. The companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time. The move would revise what is known
RSS