July 16, 2021
TAIPEI (Reuters) – The founder of chip giant TSMC appeared to take a dig at both the United States and China on Friday over their efforts to become self-sufficient at making semiconductors, saying this would drive up costs and limit technological advances.
China and the United States, propelled by their trade war and their own security concerns, have been trying to make more of the chips that run everything from smartphones and fridges to missiles, and power the global economy.
Both countries are pouring in billions of dollars, leaving Taiwan, home to Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker, as well as other makers, caught in the middle as it tries to balance Washington and Beijing.
Speaking at a virtual leaders’ meeting of the Asia-Pacific trade group APEC, where he was Taiwan’s representative, TSMC founder Morris Chang said free trade had driven the region’s economies and greatly helped chip technology develop.
“Recently, however, we note with concern the tendency to want self-sufficiency or ‘on-shoring’ of semiconductor chips,” Chang said, according to a transcript of his remarks.
“It would be highly impractical to try to turn back the clock. If it is tried, cost will go up and technology advance may slow,” he added.
“What may happen is that, after hundreds of billions and many years have been spent, the result will still be a not-quite-self-sufficient, and high-cost, supply chain.”
While Chang said that, for security applications, a self-sufficient supply chain within one’s own borders was “prudent”, that should not be the case for other applications.
“For the much larger civilian market, a supply chain substantially based on free trade system is by far the best approach.”
Asked later at a news conference whether his comments were a criticism of China and the United States, Chang would only say: “I think the countries I am talking about will know.”
While Chang is now retired from TSMC, he remains influential as the elder statesman of Taiwan’s chip industry.
Taiwan is TSMC’s most important production base, but it manufactures in China too, and is investing $12 billion to make chips in the U.S. state of Arizona.
(Reporting by Ben Blanchard; Editing by Kevin Liffey)