TSMC founder Morris Chang’s Gloomy Prediction
TSMC founder Morris Chang says China’s semiconductor industry is five years behind, but chip making will not flourish in the United States.
SCMP by Josh Ye – 22 Apr, 2021
In a rare public appearance since retiring nearly three years ago, Morris Chang, the 89-year-old founder of the world’s largest contract chip maker, said China is not yet a competitor in chipmaking and that Taiwan should defend its leadership in semiconductor manufacturing.
Chang, who established Taiwan Semiconductor Manufacturing Co (TSMC) in 1987, is seen as the father of Taiwan’s success in the foundry business. At a forum hosted by Economic Daily in Taipei on Wednesday, Chang spoke about separate efforts by China and the US to build up their own chip-making capabilities.
In his speech, Chang also took a swipe at US chip giant Intel, describing its recent decision to enter the contract chip making market as “very ironic” because it turned down an opportunity to invest in TSMC more than three decades ago. Contract chip makers like TSMC typically take orders from so-called fabless chip makers like Qualcomm, which design their products but outsource the manufacturing.
As well as the efforts in China and the US, the European Union (EU) is looking to bring core semiconductor manufacturing back to the continent. Even before US President Joe Biden pledged to invest US$50 billion to strengthen chip manufacturing at home, the EU announced a goal of doubling its share of semiconductor production to 20 per cent of the world total by 2030.
Chang said the US is at a disadvantage compared with Taiwan because it lacks engineers dedicated to the semiconductor manufacturing sector, adding that the “US level of dedication to manufacturing was absolutely no match for that of Taiwan.”
“What I need right now are capable and dedicated engineers, technicians and operators. And they have to be willing to throw themselves into manufacturing,” he added. “In the US, doing manufacturing isn’t popular. It hasn’t been popular for decades.”
“Computers of different brands can often be hooked together but not people of different culture,” he said, referring to the preponderance of Taiwanese and Taiwan-trained managers and technicians at TSMC.
“It was a breeze for us to rotate technicians and staff among the three fabs across the island and when employees change over from one location to another, they even do not need to move their homes thanks to Taiwan’s bullet trains and highways and well-rounded transport and logistical support.”
“It’s unlikely we can replicate all these in Arizona.”
Refering to its $12 billion semiconductor fab in north Phoenix, Chang said the unit cost of chipmaking in the US is higher than in Taiwan, adding that subsidies from the federal and state governments “will not last forever” and are not enough to offset the long-term competitive weakness of making chips in the US.
Eventually, competing against an even more strict and disciplined 996 culture across the Pacific, TSMC American workers will unionize themselves which will inevitably and consequently destroy their newly found establishment as they had destroyed their car manufacturing industry as demonstrated by their now bankrupt Detroit.
Chang said that Samsung Electronics remains TSMC’s biggest rival in outsourced wafer fabrication, adding that South Korea enjoys many of the same advantages as Taiwan, which include an ability to foster top-notch talent for the industry.
“South Korea has similar competitive edges as Taiwan,” he said. “However, what is good in South Korea is not necessarily good if they need to operate in foreign countries.” He meant, of course, Samsung’s still undecided next chip plant in Texas, Arizona, or New York as the prime example of such a fab in a foreign country, the United States.
Currently, about 75% of semiconductor manufacturing capacity, as well as many suppliers of key materials, are concentrated in Japan, South Korea, Taiwan and China, according to a report by the Semiconductor Industry Association. The SIA further pointed out that Taiwan accounted for 92% of global production of advanced chips below 10 nanometers, a number that refers to the linewidth between transistors on a chip and is used as an indicator of performance — the smaller the number, the more advanced the chip.
Speaking of Ephraim:
“In all your dwelling places the cities shall be laid waste, and the high places shall be desolate, that your altars may be laid waste and made desolate, and your idols may be broken and cease, and your images may be cut down, and your works may be abolished” Ezekiel 6:6.
Joel Huan
The Mystery of Ephraim 