The retired founder of TSMC said on Thursday that even as he supported US efforts to slow China’s advances in the semiconductor industry, the “bifurcation” of the global supply chain and the reversal of globalisation would increase prices and reduce the ubiquity of chips that power the modern world.
“There’s no question in my mind that, in the chip sector, globalisation is dead. Free trade is not quite that dead, but it’s in danger,” Morris Chang said, speaking at an event hosted by Taiwan’s CommonWealth Magazine.
“When the costs go up, the pervasiveness of chips will either stop or slow down considerably,” said Chang, who remains an influential voice in Taiwan’s chip industry. “We are going to be in a different game.”
In Taiwan, TSMC, Asia’s most valuable listed company and a major Apple Inc supplier, is widely regarded as the “sacred mountain protecting the country,” because of its economic importance.
China has in recent years ramped up diplomatic and military pressure against Taiwan, which Beijing views as its territory, raising concerns about the fate of the chip fabs that dot Taiwan’s western coast and produce the majority of the world’s most advanced chips if China blockades or attacks the island.
Chang described the U.S. policy of “onshoring” and “friendshoring” as a problem for Taiwan, referring to policies to boost chip manufacturing in the U.S. or in allied countries.
“Friendshore does not include Taiwan. In fact, the commerce secretary has said repeatedly that Taiwan is a very dangerous place, we cannot – America cannot – rely on Taiwan for chips,” Chang said. “Now that, of course, is I think Taiwan’s dilemma.”
China’s chip manufacturing technology lags that of Taiwan by “at least five or six years,” Chang said.
“I look at the most advanced chip they are making and they are making it with difficulty, but that chip TSMC was making five or six years ago with ease.”