PHOENIX, U.S. -- The father of Taiwan's chip industry said geopolitics have drastically changed the situation facing semiconductor makers and warned that "globalization and free trade are almost dead," and unlikely to come back.Morris Chang, founder of Taiwan Semiconductor Manufacturing Co., was speaking at an event in Phoenix, Arizona, on Tuesday where the company marked the symbolic first equipment installation at its new plant.
It is TSMC's first advanced chip plant in the U.S. in more than two decades, and Chang said a lot of "hard work" remained to make it a success.
He compared the current $40 billion project to when TSMC built its first plant in the U.S. in Camas, Washington, in 1995, just eight years after the world's biggest contract chipmaker was founded.
"Twenty-seven years have passed and [the semiconductor industry] witnessed a big change in the world, a big geopolitical situation change in the world," Chang said. "Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don't think they will be back."
His comments come amid growing fears that tensions between the U.S. and China over chips are splitting the global tech supply chain into two camps. Washington's crackdown on Beijing's chip ambitions, seen most recently in new restrictions rolled out in October, have made it increasingly difficult for companies like TSMC to serve clients in China.
Chang said he had always dreamed of building a chip plant, or fab, in the U.S. because of his own background. He was educated and worked in the U.S. for several decades. But his first experience did not go smoothly.
"It was, I thought, a dream fulfilled," Chang said. "But it [the first plant] ran into cost problems. We ran into people problems, we ran into cultural problems. The dream fulfilled became a nightmare fulfilled. It took us several years to untangle ourselves from my nightmare, and I decided that I needed to postpone the dream."
In the decades that followed, TSMC focused on building up cutting-edge chip production capacity in its home market, a strategy that helped the company keep costs down while continually honing its technological know-how.
Chang said the tool installation event -- an important milestone in building a chip plant -- signaled the end of one phase in making its U.S. bid pay off.
"The romance of the beginning is lost and the initial excitement is gone. A lot of hard work remains," the industry veteran said. But Chang added that TSMC is much more "prepared" than its first time building a chip plant in the U.S. with the support of the U.S. government.
A large delegation of top chip and tech industry CEOs attended the event, as did U.S. President Joe Biden, who lauded the plant as a win for the U.S. in its push to make cutting-edge chips domestically. TSMC announced the same day that it will triple its Arizona investment to $40 billion in order to bring its most advanced chip technology to the country.
Washington has cited national security concerns and supply issues for wanting to bring vital semiconductor production back to its shores. Many industry executives agree that the era of globalization is retreating, and that sourcing locally is now a top priority.
Lisa Su, CEO of chip developer AMD, told Nikkei Asia on the sidelines of the event that supply chain continuity is now one of the top priorities for companies like hers.
"The entire semiconductor ecosystem is ready to step up and work together. ... The industry has been through so much in the past few years. Having more geographically diversified capacity is so important," Su said, referring to the unprecedented chip shortage. "At the end of the day, what we want to do is ensure that our most important chips have a resilient supply chain."
Apple CEO Tim Cook also embraced the idea of onshoring chip production despite his company for years relying on global suppliers to lower the costs of its "designed in the U.S." products.
"Over the past several years, the progress we've made with Apple silicon has transformed our devices. It has unlocked new levels of performance for our users, enabling them to do things they could never do before," said Cook at the event. "And now, thanks to the hard work of so many people, these chips can be proudly stamped 'Made in America.' This is an incredibly significant moment. It's the chance for the United States to usher in a new era in advanced manufacturing."
"Building fabs is clearly very hard work," Nvidia CEO Jensen Huang told Nikkei Asia on the sidelines. "Today's event is marking that TSMC will be a fundamental partner of every company's aim for [supply chain] resilience. It will make TSMC even stronger. As TSMC increases its own supply chain resilience [by building a fab in the U.S.], it will give us resilience, too."
Apple, AMD and Nvidia are set to be among the first customers for TSMC's Arizona plant.
https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-founder-Morris-Chang-says-globalization-almost-dead ....
So it seems TSMC's first attempt to deploy semiconductor manufacturing in the united states occurred in 1995:
Unfortunately, he doesn't elaborate upon his comments on globalization and free trade being dead. Most will not recognize what he is referring to. The implications and after effects however could be significant and widespread. If there is a transition from a global economy to local economy, it will not be a smooth transition. The edifice of laws and regulation are structured to facilitate globalization, rather than local production and manufacturing. Businesses and job markets would have difficulty switching up labor markets and supply chains.
Everyone who supported free markets 10 years ago, appears to have left the civilized world to live in isolated cabins in the woods. Maybe that is our most accurate indicator of free trade and free markets no longer having many supporters globally? The silent shift in public opinion has been deafening.
Will globalization make a return, TSMC's founder believes it will not. The concept of globalization was always dependent upon oil and one might say it wouldn't have survived past peak oil anyway.
