TSMC’s founder criticizes plans to ‘on-shore’ chip supply chains at APEC

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On Friday, the founder of chip giant TSMC (2330.TW) appeared to criticize both the US and China for attempting to become self-sufficient in semiconductor manufacturing, claiming that this would raise costs and stifle technological progress.

Propelled by their trade war and their own security worries, China and the United States have been attempting to manufacture more of the semiconductors that power everything from cellphones and refrigerators to missiles and the global economy.

Both governments are investing billions of dollars, leaving Taiwan, home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), as well as other chipmakers, caught in the middle as it strives to strike a balance between Washington and Beijing.

TSMC founder Morris Chang said free trade had propelled the region’s economies and tremendously aided chip technology development, speaking at a virtual leaders’ summit of the Asia-Pacific trade group APEC, where he was Taiwan’s delegate.

According to a translation of Chang’s remarks, “recently, we have noted with alarm the inclination to demand self-sufficiency or ‘on-shoring’ of semiconductor chips.”

“Attempting to turn the time back would be extremely impractical. If it is tried, the cost will rise, and technological progress may be slowed “Added he.

“What may happen is that, despite hundreds of billions of dollars and many years of investment, the end result will be a supply chain that is neither self-sufficient nor low-cost.”

While Chang stated that a self-sufficient supply chain within one’s own borders is “prudent” for security applications, this should not be the case for other applications.

“For the considerably bigger civilian market, a supply chain based mostly on free trade is by far the best solution.”

When asked if his remarks were a critique of China and the United States at a later press conference, Chang merely said, “I think the countries I’m talking about would know.”

While Chang is no longer employed by TSMC, he remains a powerful figure in Taiwan’s chip sector.

TSMC’s most major manufacturing base is Taiwan, although it also manufactures in China and is investing $12 billion in the state of Arizona in the United States.

Source : Reuters

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