TSMC’s retired founder Morris Chang said on Thursday that even as he supported US efforts to slow China’s chip industry, the “bifurcation” of the global supply chain and the reversal of globalisation would increase prices and reduce the ubiquity of chips that power the modern world.
“There’s no question in my mind that, in the chip sector, globalisation is dead. Free trade is not quite that dead, but it’s in danger,” Morris Chang said, speaking at an event hosted by Taiwan’s CommonWealth Magazine.
“When the costs go up, the pervasiveness of chips will either stop or slow down considerably,” said Chang, who at 91 remains an influential voice in Taiwan’s chip industry. “We are going to be in a different game.”
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TSMC is Asia’s most valuable listed company and a major Apple supplier. In Taiwan, it is widely regarded as the “sacred mountain protecting the country”, because of its economic importance.
The threat of a Chinese invasion or blockade of Taiwan has raised concerns about the fate of the chip fabs that dot the island’s western coast and produce the majority of the world’s most advanced chips.
US “Friendshoring” dilemma
Chang said US “onshoring” and “friendshoring” efforts to boost chip manufacturing stateside or in allied countries present a predicament for Taiwan.
“Friendshore does not include Taiwan. In fact, the commerce secretary has said repeatedly that Taiwan is a very dangerous place, we cannot – America cannot – rely on Taiwan for chips,” Chang said. “Now that, of course, is I think Taiwan’s dilemma.”
TSMC is expanding its global production footprint, even as it keeps its most advanced technology in Taiwan.
Late last year, TSMC began construction of a second chip factory in Arizona which will start production in 2026, using advanced 3 nm technology. The company’s total investment in the US project amounts to $40 billion.
Meanwhile, the Chinese government is ploughing billions into bolstering its own chip sector. However, China’s chip manufacturing technology lags that of Taiwan by “at least five or six years”, Chang said.
- Reuters, with additional editing by Vishakha Saxena