HSINCHU (TVBS News) — There are many concerns about the semiconductor industry’s future in Taiwan. Should leading manufacturers, like TSMC, establish new fabs with advanced processes in other countries like the United States?
The CEO of Taiwan Semiconductor Manufacturing Company (TSMC), C. C. Wei, discussed the challenges faced by the semiconductor industry during his “Lan Jen” Lecture at National Yang Ming Chiao Tung University in Hsinchu on Saturday (Dec. 3).
The subject is interesting as the world’s leading contract chip manufacturer, often described as the leading component of Taiwan’s “silicon shield,” is not immune to U.S.-China tensions.
No Fear of Sharing Taiwan’s Know-How in the Semiconductor Industry
“In the past, most of the challenges came from competitors, but now the challenges come from “superpowers’ confrontation,” Wei said.
In his speech, the executive emphasized that outsiders should not question TSMC’s move to open new fabs in the U.S., dismissing fears of sharing Taiwan’s know-how in the semiconductor industry.
But could Taiwan’s leading industry follow in the footsteps of Japan’s bubble economy? Here is what he replied: “Impossible! Taiwan has been working hard for more than 30 years. How could it be defeated?”
According to the CEO, TSMC’s strength lies not just in its economic might but also through strong relationships with clients who are leaders in their fields worldwide.
“My boss is very smart; he pioneered a new model of semiconductor foundry in 1987,” he went on. “Our customers are worldwide, and they can’t leave us alone.”
Growing Complexity, Cost of Semiconductor Equipment
Wei has also seen the complexity of equipment grow over time since he graduated from Yale University with a Ph.D. in electrical engineering.
The first machines were bought for a million U.S. dollars, while the latest UV lithography equipment to produce semiconductors cost up to 200 million euros per machine.
The geopolitical landscape is also a concern for anyone who plans to build fabs, but it’s an even greater issue when you factor in how complex the supply chain has become.
“Everyone wants to build a semiconductor factory in their own country, but should, and could, every country build a factory?” he went on. “When semiconductor manufacturing becomes very complex, it’s impossible to do it all yourself.
The problem is that the cost of building an advanced process chip factory is between US$15 billion to US$20 billion.
Taiwan Success Based on Ecosystem and Industrial Supply Chain
Wei also remarked that many countries do not understand that TSMC has succeeded because of the ecosystem and industrial supply chain the semiconductor industry has built step by step over the past 30 years.
If TSMC increases its operations in the U.S., there is another concern about whether it can fill qualified talent at local universities without increasing costs.
“We have 7,500 R&D personnel, and when it comes to production, R&D must be next door,” remarked the TSMC executive.
TSMC usually asks the production line department to understand the (new) technology first, so they send engineers to work with the R & D Department. After the work is done, they will go to the production place together to do the production.
“This is what TSMC did when it went to AZ (Arizona), where we hired 500 to 600 people to study in Taiwan first,” he explained.
“When we go to any place to build a plant, we first look at the universities and talents nearby,” he continued.
China and the United States soaring competition has left many countries in a difficult position. But how can TSMC find its way when they face these challenges?
“We don’t participate in politics,” he concluded.
TSMC’s CEO clearly explained that the success of the Taiwan Semiconductor Industry lies in trust and collaboration. Trust and collaboration will continue thanks to Taiwan’s strong brand power and leading educational system.
But, the future of the Taiwan Semiconductor Industry remains bright.
You can follow Dimitri Bruyas on Twitter: @dimitribruyas
