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.”
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce