Taiwan Semiconductor Manufacturing Co (TSMC) founder Morris Chang (張忠謀) has repeatedly voiced concern over the weakening cost competitiveness of its US fabs and challenged the US’ “on-shore” policy of building domestic semiconductor capacity. Yet not once has the government said anything, even though the economy is highly dependent on the chip industry.
In the US, the cost of operating a semiconductor factory is at least twice the amount required to operate one in Taiwan, rather than the 50 percent he had previously calculated, Chang said on Thursday last week at a forum arranged by CommonWealth Magazine. He said that he had “underestimated” the gap. Some analysts have estimated that the cost is four times higher. TSMC said it would strive to narrow the gap by applying for as many subsidies as possible.
However, such hopes could be wishful thinking. The US disclosed the details of its Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act earlier this month. Before receiving a cut of the US$52.7 billion fund, chipmakers must meet a host of regulations, such as sharing profits with federal governments and not investing in new semiconductor capacity in China for 10 years. It was unclear if any exceptions would be made.
As long as chip costs go up, chipmakers will pass on the costs to their clients, leading to an increase in the prices of chips and end devices, from smartphones to PCs. As a result, “the ubiquity of chips will either stop, or slow down considerably,” Chang said at the forum.
The government should be concerned about a potential brain drain and the transfer of cutting-edge semiconductor technologies, as TSMC plans to produce 4-nanometer chips in the US next year, and to make 3-nanometer chips in 2026 by doubling its US investments to US$40 billion and building multiple advanced fabs. Three-nanometer chips are the most advanced chips available, and are used in high-performance computing and mobile devices. Three years from now, TSMC’s fabs would be able to make chips just one generation behind what it would be making in Taiwan.
TSMC has sent about 1,000 engineers and their families to the US on chartered flights, and more are to be dispatched to help build advanced chip capacity, as it competes with US technology giants such as Meta Platforms Inc to recruit skilled engineers.
Taiwan’s work culture is an advantage and key to producing chips extremely efficiently, Chang said.
If a piece of equipment breaks down at 1am, Taiwanese technicians fix it by 2am rather than at 9am the next morning, he said.
Most of the engineers going to work at the US fabs have signed a three-year contract with TSMC, many with the aim of acquiring US citizenship. Some engineers are likely to end up working for Intel Corp or another US chip firm after their contract expires. Intel Corp operates chip manufacturing fabs in Arizona and is building more there.
TSMC has dismissed the possibility of losing talent, saying that the number of engineers sent to the US only accounts for a small portion of its workforce. The chipmaker has more than 65,000 workers worldwide.
The semiconductor industry plays a key role in fueling Taiwan’s economy, contributing to 15 percent of the nation’s GDP. To keep the economy rolling, the government needs to protect TSMC and the local semiconductor supply chain from losing their competitive edge.
Retaining skilled talent and keeping the most advanced technology in Taiwan are as important as maintaining a stable supply of water and electricity.
In an article published in Newsweek on Monday last week, President William Lai (賴清德) challenged China to retake territories it lost to Russia in the 19th century rather than invade Taiwan. “If it is really for the sake of territorial integrity, why doesn’t China take back Russia?” Lai asked, referring to territories lost in 1858 and 1860. The territories once made up the two flanks of northern Manchuria. Once ceded to Russia, they became part of the Russian far east. Claims since then have been made that China and Russia settled the disputes in the 1990s through the 2000s and that “China
China has successfully held its Forum on China-Africa Cooperation, with 53 of 55 countries from the African Union (AU) participating. The two countries that did not participate were Eswatini and the Sahrawi Arab Democratic Republic, which have no diplomatic relations with China. Twenty-four leaders were reported to have participated. Despite African countries complaining about summit fatigue, with recent summits held with Russia, Italy, South Korea, the US and Indonesia, as well as Japan next month, they still turned up in large numbers in Beijing. China’s ability to attract most of the African leaders to a summit demonstrates that it is still being
Trips to the Kenting Peninsula in Pingtung County have dredged up a lot of public debate and furor, with many complaints about how expensive and unreasonable lodging is. Some people even call it a tourist “butchering ground.” Many local business owners stake claims to beach areas by setting up parasols and driving away people who do not rent them. The managing authority for the area — Kenting National Park — has long ignored the issue. Ultimately, this has affected the willingness of domestic travelers to go there, causing tourist numbers to plummet. In 2008, Taiwan opened the door to Chinese tourists and in
Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) on Thursday was handcuffed and escorted by police to the Taipei Detention Center, after the Taipei District Court ordered that he be detained and held incommunicado for suspected corruption during his tenure as Taipei mayor. The ruling reversed an earlier decision by the same court on Monday last week that ordered Ko’s release without bail. That decision was appealed by prosecutors on Wednesday, leading the High Court to conclude that Ko had been “actively involved” in the alleged corruption and it ordered the district court to hold a second detention hearing. Video clips