This week, TSMC, the world’s largest chip foundry, said it plans to invest $ 100 billion over the next three years to expand chip production capacity and build new factories around the world. This move is obviously a response to the industry’s concern that the production capacity of chips, as an important strategic resource, is too concentrated.
“We are entering a period of high growth. In the next few years, the multi-year general trend of 5G and high-performance computing is expected to stimulate strong market demand for our semiconductor technology. In addition, the new crown epidemic is also accelerating digitalization in all aspects.” TSMC statement.
The new crown epidemic has caused an increase in demand for home offices and online schooling, and sales of electronic products have increased accordingly. At the same time, at the end of last year, the Taiwanese chip foundry was completely filled, a fire in a Japanese factory, and Taiwan’s lack of electricity, together with the epidemic disrupting the industrial chain, followed factors that led to the global supply of wafers.
TSMC got hot. For example, Germany and Japan contacted Taiwan one after the other, hoping that Taiwan would expand the export of car chips in order to save the car industry, which stopped production due to the lack of cores.
Enthusiastically, TSMC’s market value once stood at $ 550 billion, ranking among the top ten in the world, surpassing Intel and South Korea’s Samsung to become the world’s most valuable semiconductor company.
Risk of over-concentration
However, there have been constant voice calls from the industry that chips have important strategic value and that they rely too much on the production capacity of one place, which is extremely risky.
The latest report from the American Semiconductor Industry Association (SIA) shows that almost all the most advanced chip production is in Asia, of which 92% is in Taiwan. If Taiwan cannot produce chips for a year, the global electronics industry will lose nearly $ 500 billion in revenue, and “the global electronics industry supply chain will be shut down.”
Excessive concentration of the chip industry has made it increasingly vulnerable to natural disasters and geopolitics.
At a hearing in the US Congress in February this year, Republican Senator Tom Cotton believed that the United States is very dependent on TSMC, and TSMC is sensitive to China. He therefore encouraged a law requiring the government to invest capital in the domestic chip industry in the United States.
John Neuffer, director general of the American Semiconductor Industry Association, said, “We don’t have enough semiconductor manufacturing capacity in the United States … We need to solve this problem with the help of the U.S. government.”
TSMC Chairman Liu Deiin said in a public speech that the lack of tile production capacity did not happen because the production base was concentrated in Taiwan, and the current situation will happen regardless of where the semiconductor factory is located in the world.
Squeezed between China and the United States, the TSMC has been described as a “punching bag”, fearing that it will lose Chinese orders and be unable to repel the United States.
Judging by the investment plans of recent years, it seems that TSMC has deliberately protected the risks.
In 2020, TSMC announced that it would establish a factory in Arizona, planning to produce high-tech chips for large customers such as Apple.
In the past two years, TSMC’s Nanjing plant has also started mass production. However, in accordance with Taiwanese laws and regulations, it produces only 12 nanometer (nanometer) and 16 nanometer wafers, which is still far from the most advanced process technology, but is already the most advanced wafer factory in mainland China.