Posted on 05/11/2020 10:56:02 AM PDT by Candor7
It is a risky bet for US President Donald Trump’s administration to push for building advanced semiconductor factories in the US due to growing fears about the US’ heavy reliance on Asia for chip supply and potential disruptions from uncontrollable factors such as the COVID-19 pandemic.
The US government is in discussions with chipmakers, including Taiwan Semiconductor Manufacturing Co (TSMC), to build new fabs in the US to create a self-sufficiency in chips, the latest in a slew of Trump’s renewed “Make in the US” efforts, the Wall Street Journal reported on Sunday.
Even before the pandemic, the US had reportedly increased pressure on TSMC to make chips in the US to avoid China’s potential interference in supply lines, pushing the Hsinchu-based chipmaker onto the front line of the US-China technology and trade dispute that began in 2018.
TSMC faces risks if it is seen to take a side, as the world’s largest contract chipmaker not only makes the world’s most advanced chips for processors used in Apple Inc’s iPhones and military-grade chips for US F-35 jets, but also supplies 5G chips to China’s Huawei Technologies Co.
Apple and Huawei are TSMC’s top two clients, contributing 23 percent and 14 percent respectively of its revenue last year.
Asked by a JPMorgan Chase & Co analyst about overseas fab plans, TSMC chairman Mark Liu (劉德音) last month said the firm was still scouting for sites, but to build plants producing mature technologies, rather than leading technologies.
While TSMC has not ruled out any possibilities, it “all depends on the investment and return. If it economically makes sense, then we will go ahead,” Liu said.
Advanced chips for Apple, Advanced Micro Devices and Huawei made in TSMC’s factories in Taiwan are its most cost-efficient, as it has built comprehensive and flexible supply chains here not only for its own engineers, but with its suppliers of raw materials, key components, manufacturing equipment and chip testing and packaging service providers.
These resilient supply chains mean a high level of cost efficiency and have played a crucial role in helping TSMC eclipse rivals such as Intel Corp and Samsung Electronics Co, which were once called “700-pound gorillas” by TSMC founder Morris Chang (張忠謀).
Not a single leading fab can compare to its Taiwanese fabs in terms of cost efficiency, the chipmaker has said.
For management teams at semiconductor companies, it would be unrealistic and uneconomic to operate an advanced foundry in the US, as the industry’s competitiveness is built on highly sophisticated supply chains and the cost efficiency they produce.
While Trump hopes to bring manufacturing back to the US, skeptics question the viability of such investments.
For example, Foxconn Technology Group’s investment in Wisconsin — announced to great fanfare in July 2017 — has reportedly been scaled down from the original US$10 billion for a G10.5 display fab to a smaller G6 fab, or even something even less significant.
It has been reduced so much that Wisconsin state officials have said that it no longer qualifies for the subsidies promised as part of the original deal, while construction of the plant has yet to begin and the company’s innovation centers are largely empty.
Consequently, it is doubtful whether TSMC or any other chipmaker will build a new semiconductor factory in the US any time soon.
Note: A fab is a facility that produces its own silicon wafers. A fabless facility is one that outsources the production of silicon wafers. Fabless companies focus on the design and development of their products.
I think Apple is their number one customer.
Probably a wise decision
The “T” in TSMC stands for TAIWAN.
It’s been one of the premier go to Integrated Circuit Fabs in the world for over 35 years.
There are only 3 advanced process technology companies left in the world.
TSMC
Samsung
Intel
The rest are all either gone or stuck in 14nm or older technology.
Global Foundry gave up on 7nm.
Aren’t the Taiwanese our “friends”??
Yep and TSMC does excellent work.
Qualcomm uses them for much of their stuff.
And exactly what is risky about it?
Patents are the biggest rip-off in the country. As soon as a really innovative patent comes in it is STOLEN and make by someone else.
I was an eye-witness to that TWICE.
Aren’t the Taiwanese our “friends”??
Damn straight - and good one too.
This is major winning! What we need to focus on next is rare earth mining and making sure its in US or our friends control. Thats why China’s exploitation and colonization of Africa is of great concern.
TSMC produces military grade chips , and America needs them to be secure. Imagine our new drone/attack plane, for example, with compromised chip sets ?
This Experimental Drone Could Change America’s War Strategy
Is the Kratos XQ-58A Valkyrie the future of combat aircraft?
https://www.popularmechanics.com/military/a31122720/kratos-xq58a-valkyrie-future/
In dealing with China, this is essentially giving away intellectual property. They don't respect patents. Whatever they have access to, is theirs. They assimilate the technology of other nations - kind of like the Borg.
And exactly what is risky about it? >>>>>>>>>>>>>>
Return on investment is risky. Or so they say. Maybe they are thinking about when PDJT is not in office.Are they betting against his re-election? The Dems would allow Red China to steal their patents from the USA.
ROI is not risky to Trump. It’s risky for the manufacturer. It’s a risk to all businesses. Improvise, Adapt and Overcome.
The cocoon story is lies.
I just watched the documentary “American Factory”, about a Chinese company taking over an abandoned GM factory in Ohio and turning it into an auto glass factory.
It really highlights some of the profound cultural differences, work ethics, managerial and worker attitudes.
A real eye opener that raises questions at many levels.
I highly recommend it.
This should be one of the top re-election goals for 2020 to swing a deal for a TSMC fab.
This should be one of the top re-election goals for 2020 to swing a deal for a TSMC fab.>>>>>>>>>>>>>>
Agreed. The Trump Re-election Campaign should be pushing this big time.(Are you listening Donald Jr and Kimberly Guilfoyle?)
I am pretty sure Jared Kushner could pull it off quite handily.
So; would I be correct in assuming that mainland China ALSO has to get chips from the Taiwanese; too?
Well, the Chinese are welcome to all that is Africa.
Talk about a no-win.
Back around 2002, Mainland China was trying to swing a cross license agreement with Intel.
It nearly happened until someone high up at Intel pointed out the obvious that China was trying to get access at Intel’s patents and advanced technology.
China since then has been trying to invent advanced process technology but so far has been unable.
Beyond 14nm, things get very expensive and much more difficult.
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