Blocking China's chip industry will raise costs, warns founder of TSMC

Robert Besser
19 Mar 2023, 13:58 GMT+10

The founder of chip manufacturer TSMC, Morris Chang, said that he supports the efforts of the US to slow China's advances in the semiconductor industry.
Asia's most valuable listed company and a major Apple supplier, TSMC is widely regarded in Taiwan as the "sacred mountain protecting the country," due to its economic importance.
Chang, 91, said, "There is no question in my mind that, in the chip sector, globalization is dead. Free trade is not quite that dead, but it is in danger."

TAIPEI, Taiwan: The founder of chip manufacturer TSMC, Morris Chang, said that he supports the efforts of the US to slow China's advances in the semiconductor industry.

However, he stressed that prices would increase and the availability of the wide variety of chips that power the modern world will decline due to the "bifurcation" of the global supply chain and the reversal of globalization.

At an event hosted by Taiwan's CommonWealth Magazine, Chang, 91, said, "There is no question in my mind that, in the chip sector, globalization is dead. Free trade is not quite that dead, but it is in danger."

"When the costs go up, the pervasiveness of chips will either stop or slow down considerably. We are going to be in a different game," he added.

Asia's most valuable listed company and a major Apple supplier, TSMC is widely regarded in Taiwan as the "sacred mountain protecting the country," due to its economic importance.

In recent years, China has applied more diplomatic and military pressure against Taiwan, which Beijing views as its territory.

At the same time, Taipei is in a predicament regarding US efforts to boost chip manufacturing locally or in allied countries.

In 2022, TSMC began construction of a second chip factory in Arizona that uses advanced technology, which will begin production in 2026, bringing it total investment in the US to $40 billion.

In response, the Chinese government has invested billions in the country's chip sector, but Chang said China's chip manufacturing technology lags behind that of Taiwan by "at least five or six years."