Taiwan has edge over U.S., China in chip foundry battle: TSMC founder

04/22/2021 05:08 PM
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Morris Chang / CNA file photo
Morris Chang / CNA file photo

Taipei, April 22 (CNA) Taiwan is still leading the United States and China in the chipmaking industry, but it will be difficult for another Taiwanese firm to duplicate the success of Taiwan Semiconductor Manufacturing Company (TSMC), the firm's founder Morris Chang (張忠謀) said Wednesday.

Speaking at a seminar on Taiwan's competitiveness in chip production, the 89-year-old Chang said Taiwan's talent pool of quality engineers, technicians and factory workers are the main reason why TSMC has excelled in the semiconductor foundry business.

Another factor is Taiwan's convenient transportation network, which allows huge and quick transfers of personnel around the country for work purposes, he said at the seminar hosted by the Economic Daily News.

Chang also lauded the company's professional managers, saying their leadership and devotion to research and development, coupled with the efforts of the workers and the support of the government and local population, had helped TSMC evolve into a world-class company.

The U.S., on the other hand, saw a decline in manufacturing activities decades ago and has been focusing instead on research and development and the financial sector, Chang said.

Even though the U.S. government has been increasing funding for its semiconductor industry, Chang said, he is not worried because production costs are significantly higher in the U.S. than in Taiwan. Short-term federal and state subsidies will do little to reverse the U.S.' competitive disadvantage in the long term, he said.

China, meanwhile, has spent tens of billions of U.S. dollars over the past 20 years to help nurture its domestic companies, but their semiconductor manufacturing process lags behind TSMC's by at least five years, and their logic IC design is also one to two years behind the U.S. and Taiwan's, Chang said.

South Korea's Samsung Electronics Co. is the only strong competitor against TSMC currently, because that country also has a vibrant manufacturing sector and a competitive talent pool similar to Taiwan's, said Chang, who retired from TSMC in June 2018.

Despite Taiwan's advantage in the semiconductor industry, he said, it will not be easy for another domestic firm to duplicate the role of his company as the world's leading dedicated semiconductor foundry and a protective shield that underpins Taiwan's economy.

"My answer is, it will be difficult" to find another company that is so important to the rest of the world and holds such a large global market share and competitive edge, he said.

Founded in 1987 by Chang as a chip foundry business, TSMC has become enormously important, as the global information technology sector is highly dependent on its products.

TSMC is dubbed as a "protective sacred mountain" for Taiwan against China, amid the latter's technology war with the U.S.

Semiconductor wafer manufacturing is of extreme importance to people's livelihood, a country's economy, and national defense, Chang said.

In 2020, TSMC's market capitalization topped US$600 billion, the highest among the world's semiconductor companies.

(By Flor Wang and Chang Chien-chung)

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