US Sanctions on China to Hit Dominance of Chips: TSMC Founder


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.”


Also on AF: Chip Giant TSMC to Hire 6,000 Engineers in 2023


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.

China has in recent years ramped up diplomatic and military pressure against the self-ruled island, which Beijing views as its territory.

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


Also read:

TSMC Dumped by Several Funds Including Buffett’s Berkshire

Money Alone Can’t Rescue China’s Chip Sector, Experts Say

TSMC Plans $7.4-Billion Second Japan Fab For High-End Chips

TSMC Not Leaving, Says Taiwan as Arizona Factory Fuels Worry

US Would ‘Destroy Taiwan Chip Factories if China Invaded’ – BI

High Cost, ‘Unmanageable’ US Staff Plague TSMC in Arizona – NYT


Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has been working as a digital journalist since 2013, and is an experienced writer and multimedia producer. As an eager stock market trader and investor, she is keenly interested in economy, emerging markets and the intersections of finance and society. You can tweet to her @saxenavishakha

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