Semiconductor giant TSMC was brought up this week by US President Joe Biden and Apple CEO Tim Cook during a ceremony to unveil its $40 billion manufacturing site in Arizona – helping to secure the supply of America’s most advanced chips A great investment designed to.
But in Taiwan, there is deep unease about growing political and business pressure on the world’s most important chipmaker to expand internationally. The company is building a facility in Japan and is looking to invest in Europe.
“They’re like the Hope Diamond of semiconductors. Everyone wants them,” said G. Dan Hutcheson, vice chairman of TechInsights, a research organization specializing in chips. (The Hope Diamond is the world’s largest blue diamond, now It is in the National Museum of Natural History of the Smithsonian Institute in Washington.)
“Customers in China want them to build there. Customers in the US want them there. And customers in Europe want them there too.”
In addition to the risk that TSMC will take its most advanced technology with it – stripping Taiwan of one of its unique assets and reducing employment opportunities locally – there are fears that a reduced presence for the company could make Taipei more attractive to Beijing. which vowed to take control of the self-governing island, by force if necessary.
TSMC is considered a national treasure in Taiwan and supplies tech giants including Apple (AAPL) and Qualcomm (QCOM). It massively produces some of the most advanced semiconductors in the world, components that are critical to the smooth running of everything from smartphones to washing machines.
The company is considered so valuable to the global economy as well as to China – which claims Taiwan as its territory despite never controlling it – that it is sometimes referred to as part of a “Silicon Shield”. Also referred to as. Possible military aggression by Beijing. TSMC’s presence gives the West a strong incentive to defend Taiwan against any attempt to take Taiwan by force.
“The idea is that if Taiwan becomes a powerhouse in semiconductors, the US has to support and defend it,” Hutchinson said. “The strategy has been super successful.”
A day before Tuesday’s Phoenix ceremony, Chiu Chenyuan, a lawmaker from the opposition Taiwan People’s Party, asked Foreign Minister Joseph Wu about whether there was a “secret deal” with the United States to hurt Taiwan’s chip industry.
Chiu claimed that the chip giant was under political pressure to move its operations and its most advanced technology to the US. He cited the relocation of 300 people, including TSMC engineers, to the Arizona plant. In response, Wu said that there was no secret deal, nor was there any attempt to downplay Taiwan’s importance to TSMC.
Patrick Chen, Taipei-based head of research at CL Securities Taiwan, said there was a common concern on the island about TSMC’s growing international importance, the pressures it faces to expand and what this means for Taiwan.
“It is similar to what happened in the US in the 70s and 80s when manufacturing jobs were being moved from states to other countries. Many local jobs are gone and the cities are bankrupt,” he said.
CNN has asked TSMC for comment about its expansion plans.
Its CEO, CC Wei, previously said: “Every region is important to TSMC,” adding that it will “continue to serve all customers around the world.”
Founded in 1987 by Morris Chang, TSMC is not a household name outside Taiwan, even though it produces an estimated 90% of the world’s super-advanced computer chips.
Semiconductors are an essential part of almost every electronic device. They are difficult to manufacture due to the high cost of development and the level of knowledge required, meaning that most production is concentrated among a handful of suppliers.
Concerned about losing access to critical chips, especially as tensions between China and the United States as well as Beijing and Taipei escalate, governments and major consumer-facing companies such as Apple have encouraged semiconductor companies to expand their operations. Have asked to localize, according to experts.
Chris Miller, author of “Chip War: The Fight for the World’s Most Critical Technology,” said, “TSMC’s decision to expand the Arizona investment is evidence that politics and geopolitical risk are more important than ever in supply chain decisions.” will play a big role.”
“It also suggests that TSMC’s customers are asking for greater geographic diversification, which is something that previously was not a major concern of major customers.”
On Tuesday, TSMC said it is expanding its investment in the US by building a second semiconductor factory in Arizona, raising its total investment there from $12 billion to $40 billion.
Chang had previously said that its plant in Arizona would produce 3-nanometer chips, the company’s most advanced technology since advances in chip manufacturing have required etching ever-smaller transistors onto silicon wafers.
These announcements worry politicians like Chiu of the Taiwan People’s Party. He is concerned about the loss of the island as TSMC is globally renowned.
Chen of CL Securities said national security concerns among governments globally are driving TSMC’s expansion. But he believes the company will continue to manufacture its most advanced technology at home.
“It would make economic sense [the] low pay [and] High quality of Taiwanese engineers,” he said, adding that the company needed approval from Taiwan’s Ministry of Economic Affairs to transfer its most advanced technologies overseas, which was unlikely to be granted.
Many experts believe that as long as 3-nanometer chips are being made in Arizona, TSMC’s Taiwan operation will be producing even smaller, more advanced chips.
Hutcheson also believes that TSMC will retain its most cutting-edge development teams in Taiwan.
“Once you have a team of people doing development work, they work together. You don’t want to disrupt that. It’s not an easy thing to do,” he said.
— CNN’s Wayne Chang contributed to this report.