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OpenAI CEO's US$7 trillion chip figure 'whimsical': Pegatron boss

02/21/2024 09:30 PM
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Pegatron Chairman Tung Tzu-hsien (center) is pictured with Digitimes founder Huang Chin-yung (left) and CommonWealth Magazine editor-in-chief Wu Yun-i at a talk on the semiconductor industry at Taipei International Book Exhibition on Wednesday. CNA photo Feb. 21, 2024
Pegatron Chairman Tung Tzu-hsien (center) is pictured with Digitimes founder Huang Chin-yung (left) and CommonWealth Magazine editor-in-chief Wu Yun-i at a talk on the semiconductor industry at Taipei International Book Exhibition on Wednesday. CNA photo Feb. 21, 2024

Taipei, Feb. 21 (CNA) Pegatron Chairman Tung Tzu-hsien (童子賢) described OpenAI CEO Sam Altman's US$7 trillion (NT$221 billion) plan to "reshape the global semiconductor industry" as a "whimsical" endeavor that will only lead to oversupply.

Noting that Altman's figure was nearly 10 times Taiwan's gross domestic product (GDP), Tung told a book event that the world would be better served if "one trillion is provided for [the research of] nuclear fusion and another two trillion for green power."

Tung described the number as "whimsical," and one that would see the whole industry face the problem of oversupply.

"You need the right timing, the right place, and the right people," Tung said, adding that it was not as if with seven trillion "you could suddenly have ten times more students who study in information, electronics, physics or chemistry."

Such an effort would not just rely on chip manufacturers, such as Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, "the packaging and the chemical materials in the upstream would have to be in place as well," Tung said.

Huang Chin-yung (黃欽勇), the founder and president of online tech media Digitimes, said the reason "seven trillion," an almost impossible number, was discussed is "exactly because it is simply too hard and that what is to be achieved is imaginable only with such large amount of money."

Huang's new book, titled "World Semiconductor Classic - Quarterfinals in 2030" discussing the new supply chain of chips in Asia and Taiwan's role in it, was featured at the book event.

Insofar as Altman was talking about reshaping the global chip industry and building a resilient supply chain, he was imagining a world without relying on a few big chip makers, of which TSMC - producer of around 90 percent of the world's advanced chips - is one.

Around 55 percent of the world's chips, including most of the advanced ones, are made by TSMC, so the company is almost irreplaceable with regard to its manufacturing capacity and technologies, Huang said.

The second edge of TSMC is that it has roughly 450 to 500 core customers, which is a lot more than 120-ish that second-placed Samsung has, Huang said.

"TSMC CEO C.C. Wei (魏哲家) once said negotiating with a core customer requires two years. We can thus say that if a company is still far behind in its two- or three-nanometer chip technologies, there is no pressing pressure for TSMC when it comes to [holding onto] its core customers," Huang continued.

The third is the fact that since 2015 capital investment accounts for a third of TSMC's revenue every year and that it has more than ten thousand people working in research and development, Huang said.

"It is nearly impossible to beat TSMC in the near future with traditional means," Huang said.

Pegatron's Tung added that one would need seven or 15 years to "plan ahead" to even consider surpassing TSMC, adding "I don't know if even that would be enough."

(By Alison Hsiao)

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