TSMC’s U.S. Plant Won’t Lead To Tech Transfer Says Taiwan Minister To Opposition

Ramish Zafar

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

Legislators in Taiwan debated the Taiwan Semiconductor Manufacturing Company's (TSMC) latest manufacturing facility in the U.S. yesterday. TSMC is building a new facility in Arizona and it celebrated the first machines arriving at the facility with much pomp and fair earlier this month. The even was attended by a high profile guest list, which started from President Joe Biden and extended all the way to include the Commerce Secretary Gina Raimondo, and the heads of Apple, Inc, Advanced Micro Devices, Inc (AMD) and NVIDIA Corporation. The facility in Arizona plans to initially start manufacturing chips on the 4-nanometer process, and extend this to include 3-nanometer as well.

Yesterday, Taiwanese officials debated whether the facility will harm the region's competitiveness in the global chip supply chain and if there was any reason to worry about technology transfer. Kung Ming-hsin

Taiwan's Head of Policy Planning Assures Legislators That TSMC's U.S. Facility Will Not Harm Region's National Interest

Debate around the facility started when the opposing KMT Party's legislator from the New Taipei  9th District Mr. Lin Te-fu asked Kung Ming-hsin, the head of Taiwan's planning ministry, about the implications of TSMC opening a manufacturing plant in the U.S. will have an adverse impact on Taiwan's local chip manufacturing industry.

In response, Dr. Kung, who is a Ph.D. in Economics, responded that in his opinion there will be no impact since TSMC's most advanced chip manufacturing technologies, research and moneymaking plants will continue to stay in Taiwan. TSMC is currently building 3-nanometer chips in Taiwan, which is one of the most advanced chip manufacturing processes in the world right now. The company will produce these chips at the American plant in 2026 according to its official announcement; a decision that will ensure that its leading edge technologies continue to stay in Taiwan.

This is due to the fact that a year before that, TSMC aims to start manufacturing the significantly more advanced 2-nanometer chips in Taiwan. These chips will potentially use newer chipmaking machines as well as a different transistor design when compared to the 3-nanometer products.

TSMC's top executives stand with President Joe Biden as part of a ceremony earlier this month.

Mr. Te-fu then raised questions about whether TSMC's advanced technologies will remain protected despite the U.S. chip plant. Dr. Kong's response to this was telling, as he asserted that not only do TSMC's latest technologies remain protected, but that the investment in the 1-nanometer manufacturing project will also be located in Taiwan.

Since this particular technology is far down TSMC's technology roadmap, the company has shared few details about it, but the minister's comments indicate that discussions for it are underway with the Taiwanese government. Intel's latest upgrade to its process roadmap does not share any details for 1-nanometer either, with the firm now expecting to start 2-nanometer (18A) chip manufacturing in the first half of 2024 and then move to 1.8-nanometers in the second half.

The debate took place in the Taiwanese Legislative Yuan, and Mr. Te-fu also asked whether there were any concerns of qualified talent from TSMC making its way to the U.S. - similar to some instances where engineers and others from the island's chip industry have gone to China. In response, Dr. Kong explained that semiconductor manufacturing is not an isolated process, but instead it is part of a diverse ecosystem in which Taiwan has already cooperated with the U.S. in several areas.

While fabs such as those belonging to TSMC and Samsung are located outside America, it is nevertheless home to nearly every major backend technology and testing company. These firms are involved throughout the chip manufacturing supply chain, as they provide the tools for designing, validating and testing the chips.

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