TSMC founder says he supports US efforts to slow China's chip advances

 March 16, 20231:38 PM GMT+7

By Sarah Wu

Morris Chang, the founder of the Taiwan Semiconductor Manufacturing Company (TSMC), speaks on stage during a Chip War book event in Taipei, Taiwan March 16, 2023. REUTERS/Ann Wang

TAIPEI, March 16 (Reuters) - The retired founder of TSMC (2330.TW) said on Thursday that even as he supported U.S. efforts to slow China's advances in the semiconductor industry, the "bifurcation" of the global supply chain and the reversal of globalisation would increase prices and reduce the ubiquity of chips that power the modern world.

"There's no question in my mind that, in the chip sector, globalisation is dead. Free trade is not quite that dead, but it's in danger," Morris Chang said, speaking at an event hosted by Taiwan's CommonWealth Magazine.

"When the costs go up, the pervasiveness of chips will either stop or slow down considerably," said Chang, who at 91 remains an influential voice in Taiwan's chip industry. "We are going to be in a different game."

In Taiwan, TSMC, Asia's most valuable listed company and a major Apple Inc (AAPL.O) supplier, is widely regarded as the "sacred mountain protecting the country," because of its economic importance.

China has in recent years ramped up diplomatic and military pressure against Taiwan, which Beijing views as its territory, raising concerns about the fate of the chip fabs that dot Taiwan's western coast and produce the majority of the world's most advanced chips if China blockades or attacks the island.

U.S. "onshoring" and "friendshoring" efforts to boost chip manufacturing stateside or in allied countries present a predicament for Taiwan.

"Friendshore does not include Taiwan. In fact, the commerce secretary has said repeatedly that Taiwan is a very dangerous place, we cannot - America cannot - rely on Taiwan for chips," Chang said. "Now that, of course, is I think Taiwan's dilemma."

TSMC is expanding its global production footprint, even as it keeps its most advanced technology in Taiwan.

Late last year, TSMC began construction of a second chip factory in Arizona which will start production in 2026, using advanced 3 nm technology. The company's total investment in the U.S. project amounts to $40 billion.

Meanwhile, the Chinese government is plowing billions into bolstering its chip sector, but Chang said China's chip manufacturing technology lags that of Taiwan by "at least five or six years".

Writing by Sarah Wu and Brenda Goh; Editing by Muralikumar Anantharaman and Gerry Doyle

https://www.reuters.com/technology/tsmc-founder-says-he-supports-us-efforts-slow-chinas-chip-advances-2023-03-16/