TSMC founder attacks US/China onshoring efforts

TSMC founder Morris Chang has criticised both the US and China over their efforts to become self-sufficient at making semiconductors, saying that they would end up driving costs higher and limiting technological advances.

Both economies have been trying to make more semiconductors domestically in response to chip shortages, their on-going trade war and due to security concerns.

China and the US are currently looking to spend billions of dollars on new capacity and in the process have placed TSMC, the world’s largest contract chipmaker, in a diffucult position as it looks to work with both.

Speaking at a virtual meeting of the Asia-Pacific trade group APEC, where he was Taiwan’s representative, Chang said free trade had driven the region’s economies and greatly helped chip technology develop.

According to Chang the tendency to want self-sufficiency or ‘on-shoring’ of Semiconductor chips was a worry.

“It would be highly impractical to try to turn back the clock. If it is tried, costs will go up and technology advances may slow,” he said. “What may happen is that, after hundreds of billions and many years have been spent, the result will still be a not-quite-self-sufficient, and high-cost, supply chain.”

Chang is now retired from TSMC, but remains influential in the chip industry, and while he said that for security applications, a self-sufficient supply chain within a country’s own borders was “prudent”, it would not be the case for other applications.

“For the much larger civilian market, a supply chain substantially based on free trade system is by far the best approach.”