As TSMC plans to spend $40 billion to build two chip manufacturing plants in the US, the Asian foundry giant’s CEO is bemoaning the way America’s growing rift with China has messed with the global semiconductor industry.
In a speech at a recent industry event, CC Wei echoed the statement earlier this month by TSMC founder Morris Chang about globalization being nearly dead and dished out his thoughts on how Uncle Sam’s chip sanctions against China has created new challenges for semiconductor companies.
“Geopolitical confrontation has distorted the entire market. Previously, you make a product and could sell it to the whole world. Now, some products are not allowed to be sold, some countries say that you are not allowed to enter, while some say you can only use certain [local] products,” said Wei, according to Japanese newspaper Nikkei.
Bloomberg reported that Wei said excessive export controls, like those pushed by the US, have deteriorated free trade and mutual trust between countries.
“Export controls and banning products from other foreign countries destroy productivity and efficiency gained under globalization, or at least they reduce benefits offered by a free market. But the scariest thing is that mutual trust and cooperation among countries is beginning to weaken,” Wei was quoted as saying.
TSMC is among the companies with operations and customers in China that has found itself in the crosshairs of growing US restrictions against the Middle Kingdom.
A key reason the company has been swept up in Uncle Sam’s latest sanctions against China is they revolve around blocking the export of US manufacturing equipment that, in many cases, is used to fabricate advanced chips. What will complicate the situation further is that the White House is hoping to soon convince other key suppliers for advanced chipmakers like TSMC — Japan and the Netherlands — to enforce similar trade restrictions against China.
US sanctions against China have already forced TSMC to pivot manufacturing plans with two Chinese customers, Alibaba and Biren Technology, who were reportedly forced to halt production of new GPUs so that they could reduce their processing speeds to comply with the new restrictions.
While Wei sounds miffed about how the rift between the US and China has impacted his industry, it’s no secret that his company has pushed to receive government subsidies from the US government for the company’s multibillion-dollar fab site in Arizona.
But Wei said TSMC’s selection of new plant locations is never about politics and subsidies but rather what customers demand. In the case of the Arizona fab project, it was Apple, Nvidia, and AMD who pushed for the company to expand in the US.
“We will only go to those countries because of our customers’ demand,” Wei said.
It’s fair to say that while TSMC wants to continue doing business in China, the company likely doesn’t view the Middle Kingdom’s government as a friend.
That’s because TSMC’s homeland of Taiwan has faced increasing aggression from China, which claims the self-governing island nation as its own and has not ruled out using military force to “reunify” the two. That, in turn, has created concerns that China could take over TSMC’s fabs in Taiwan if an invasion were to happen, but TSMC’s chairman recently said such an action would render the factories inoperable due to their reliance on global supply chains. ®
