Fragmented chip manufacturing brings big risks, says TSMC founder

July 23, 2021 // By Peter Clarke
TSMC founder warns 'on-shoring' chip manufacturing could backfire
The drive to 'sovereignty' in chip making could cost hundreds of billions of dollars, slow down development and still not provide regions with self-sufficiency, says Morris Chang, the retired chairman and founder of foundry chipmaker TSMC.

Morris Chang, the retired chairman and founder of foundry chipmaker TSMC, has warned of the risks of fragmenting foundry capacity around the world from a lack of skilled staff to run the plants to a lack of critical mass in the infrastructure.

"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 a high-cost supply chain," he said in reports in the Nikkei newspaper.

The US, Japan and Europe have all been alerted to the risk of depending on a globalized chip supply chain over the last nine months as chip shortages have caused slow downs and shut downs at numerous factories. As the politicians belatedly recognize how dependent national economies are on semiconductors they are trying to pressure commercial companies to build domestic plants.

The Chinese government has also been seeking to build up its independence in semiconductors for many years although one of its instruments of change Tsinghua Unigroup has effectively gone bust recently owing billions of dollars.

Chang agreed that chips that are vital to national security should be made domestically. But Chang is apparently defining national security narrowly to effectively embody defense and weapons systems and key communications. "It will make more sense that all the other civilian-use semiconductors should be traded freely internationally," Nikkei reported Chang saying.

However, having resisted calls for a fab in Europe, TSMC is now reported to be in discussions about a site for a 12nm fab in Dresden, Germany, to support local car makers.

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