TSMC Founder: Intel’s Fab Push Is Ironic, Taiwan Engineers More Devoted Than Americans

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The Taiwan Semiconductor Manufacturing Company's (TSMC) chairman Mr. Morris Chang participated in a think tank forum in Taiwan earlier today. At the forum, he gave a keynote speech in which he shared his opinions on the current semiconductor landscape, involving chipmaker Inte Corporation' decision to allocate $20 billion in spending for a new plant in Ocotillo, Arizona and TSMC's greatest advantages when it comes to competing globally in the contract chipmaking sector.

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In his talk, Mr. Chang openly shared his opinion on Intel's move to expand its chip production in Arizona. The Santa Clara chip giant plans to not only expand its current manufacturing capacity, but it will also enter the contract chipmaking space, expecting to court orders from companies such as Qualcomm Incorporated who design their processors but outsource production to companies such as TSMC and Samsung Electronics' foundry arm Samsung Foundry.

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According to him, when he created TSMC, he also sought investment from Intel Corporation to help to set his company up. At the time, Intel refused the offer - with economic conditions and the timing being contributing factors behind the company's decision. Taking stock of the company's decision to enter the contract chipmaking sector more than three decades after its decision to not invest in TSMC, Mr. Chang described the situation as "ironic."

Intel's decision to become a contract manufacturer will also have implications for TSMC, with the latter currently pursuing plans to establish a foundry in Arizona. This plant is expected to commence mass production by 2024 on the 5nm chip process node, with TSMC's cleanroom supplier expecting to deliver equipment to it in the third quarter of next year.

Commenting on this, Mr. Chang believes that TSMC's greatest strength is Taiwan. He believes that Taiwanese engineers are more professional when compared to their American counterparts, going as far as to state that, "No one in the United States is as dedicated to their work as in Taiwan."

TSMC's founder Mr. Morris Chang (Zhang Zhongmou), during his keynote earlier today. Image: Lin Xunyi/United Daily News

He also outlined the importance of Taiwan's high-speed rail network in allowing TSMC's engineers to rapidly commute between the island's various districts, going on to add that the company also provides housing at its facilities for those looking to avoid the commute. Building upon this, Mr. Chang questioned whether engineers would be equally motivated to work in Arizona since they will not have such facilities in the U.S. The Taiwanese company is encouraging its employees to join the Arizona facility, with rumors speculating that the scope of its investment in the plant might touch $35 billion.

Sharing his view on the chipmaking divide between mainland China and Taiwan, he stated that China is five years behind TSMC in semiconductor fabrication and two years behind in logic fabrication. TSMC's biggest rival right now is South Korea, with Samsung Foundry enjoying manufacturing advantages similar to his company believes Mr. Chang. Under the guidance of its new chief executive officer Mr. Patrick Gelsinger, Intel Corporation is also taking steps to bring its leading-edge process nodes to mass production at a level similar to that enjoyed by TSMC.

Mr. Chang reiterated concerns present among other Taiwanese chip industry officials that the unit costs of manufacturing processors in the U.S. are higher than Taiwan's. He also believes that the subsidies offered by the American government to establish chipmaking facilities in the country will bear only short-term advantages, with Taiwan leading through its labor and cost advantages in the long term.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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