It is a risky bet for US President Donald Trump’s administration to push for building advanced semiconductor factories in the US due to growing fears about the US’ heavy reliance on Asia for chip supply and potential disruptions from uncontrollable factors such as the COVID-19 pandemic.
The US government is in discussions with chipmakers, including Taiwan Semiconductor Manufacturing Co (TSMC), to build new fabs in the US to create a self-sufficiency in chips, the latest in a slew of Trump’s renewed “Make in the US” efforts, the Wall Street Journal reported on Sunday.
Even before the pandemic, the US had reportedly increased pressure on TSMC to make chips in the US to avoid China’s potential interference in supply lines, pushing the Hsinchu-based chipmaker onto the front line of the US-China technology and trade dispute that began in 2018.
TSMC faces risks if it is seen to take a side, as the world’s largest contract chipmaker not only makes the world’s most advanced chips for processors used in Apple Inc’s iPhones and military-grade chips for US F-35 jets, but also supplies 5G chips to China’s Huawei Technologies Co.
Apple and Huawei are TSMC’s top two clients, contributing 23 percent and 14 percent respectively of its revenue last year.
Asked by a JPMorgan Chase & Co analyst about overseas fab plans, TSMC chairman Mark Liu (劉德音) last month said the firm was still scouting for sites, but to build plants producing mature technologies, rather than leading technologies.
While TSMC has not ruled out any possibilities, it “all depends on the investment and return. If it economically makes sense, then we will go ahead,” Liu said.
Advanced chips for Apple, Advanced Micro Devices and Huawei made in TSMC’s factories in Taiwan are its most cost-efficient, as it has built comprehensive and flexible supply chains here not only for its own engineers, but with its suppliers of raw materials, key components, manufacturing equipment and chip testing and packaging service providers.
These resilient supply chains mean a high level of cost efficiency and have played a crucial role in helping TSMC eclipse rivals such as Intel Corp and Samsung Electronics Co, which were once called “700-pound gorillas” by TSMC founder Morris Chang (張忠謀).
Not a single leading fab can compare to its Taiwanese fabs in terms of cost efficiency, the chipmaker has said.
For management teams at semiconductor companies, it would be unrealistic and uneconomic to operate an advanced foundry in the US, as the industry’s competitiveness is built on highly sophisticated supply chains and the cost efficiency they produce.
While Trump hopes to bring manufacturing back to the US, skeptics question the viability of such investments.
For example, Foxconn Technology Group’s investment in Wisconsin — announced to great fanfare in July 2017 — has reportedly been scaled down from the original US$10 billion for a G10.5 display fab to a smaller G6 fab, or even something even less significant.
It has been reduced so much that Wisconsin state officials have said that it no longer qualifies for the subsidies promised as part of the original deal, while construction of the plant has yet to begin and the company’s innovation centers are largely empty.
Consequently, it is doubtful whether TSMC or any other chipmaker will build a new semiconductor factory in the US any time soon.
Jaw Shaw-kong (趙少康), former chairman of Broadcasting Corp of China and leader of the “blue fighters,” recently announced that he had canned his trip to east Africa, and he would stay in Taiwan for the recall vote on Saturday. He added that he hoped “his friends in the blue camp would follow his lead.” His statement is quite interesting for a few reasons. Jaw had been criticized following media reports that he would be traveling in east Africa during the recall vote. While he decided to stay in Taiwan after drawing a lot of flak, his hesitation says it all: If
When Democratic Progressive Party (DPP) caucus whip Ker Chien-ming (柯建銘) first suggested a mass recall of Chinese Nationalist Party (KMT) legislators, the Taipei Times called the idea “not only absurd, but also deeply undemocratic” (“Lai’s speech and legislative chaos,” Jan. 6, page 8). In a subsequent editorial (“Recall chaos plays into KMT hands,” Jan. 9, page 8), the paper wrote that his suggestion was not a solution, and that if it failed, it would exacerbate the enmity between the parties and lead to a cascade of revenge recalls. The danger came from having the DPP orchestrate a mass recall. As it transpired,
Much has been said about the significance of the recall vote, but here is what must be said clearly and without euphemism: This vote is not just about legislative misconduct. It is about defending Taiwan’s sovereignty against a “united front” campaign that has crept into the heart of our legislature. Taiwanese voters on Jan. 13 last year made a complex decision. Many supported William Lai (賴清德) for president to keep Taiwan strong on the world stage. At the same time, some hoped that giving the Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) a legislative majority would offer a
Owing to the combined majority of the opposition Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP), the legislature last week voted to further extend the current session to the end of next month, prolonging the session twice for a total of 211 days, the longest in Taiwan’s democratic history. Legally, the legislature holds two regular sessions annually: from February to May, and from September to December. The extensions pushed by the opposition in May and last week mean there would be no break between the first and second sessions this year. While the opposition parties said the extensions were needed to
RSS