The Taiwan Semiconductor Manufacturing Company's (TSMC) founder, Dr. Morris Chang, believes that not only does his company have the right skillset to make its new chipmaking plant in the U.S. a success but also that Taiwan's edge in the semiconductor manufacturing industry can erode in the next two to three decades. Dr. Chang shared his opinion at TSMC's annual Sports Day earlier today in Taiwan. TSMC holds the event each year, but recently, it was forced to cancel it due to restrictions due to the coronavirus pandemic. As part of his remarks, he shared stories about the hard work that TSMC's engineers have to do to ensure that the firm's facilities remain operational and his experience in setting up the world's biggest contract chip manufacturer.
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2023 has been quite a tumultuous time for TSMC as the firm has had to deal with one set of bad news followed by another. The year has been slow for the chip sector, as a glut in the personal computing market has reduced shipments. As a result, TSMC's revenue has been dropping consistently annually for almost every month this year, and to keep up with the slowdown, the firm has already cut its revenue guidance twice this year.
At the same time, a new chip manufacturing plant that the firm is building in the U.S. has also been delayed due to what TSMC describes as difficulties in setting up advanced equipment. Commenting on the delay, Dr. Chang shared that it was always his dream to set up a chip plant in the U.S. decades ago when he created TSMC. Between then and now, it has better funds, talent and technology, which he believes can help the firm make his dream come true.
Dr. Chang, who has been regularly sharing that globalization is over, also commented on this particular topic. According to him, globalization in the semiconductor industry is officially over, as countries are now concerned with localizing chip production to ensure that there is no disruption in case of a conflict. However, he reamined optimistic, sharing that TSMC can overcome these current hurdles, going on to add that one of the biggest threats that the firm faces from its competitors con from global worries of national security related to the semiconductor supply chain.
Additionally, TSMC's founder also believes that the next three to four years for the firm can prove to be some of its toughest with respect to the global political environment. Building on this, Dr. Chang shared that his country might lose its dominant place in the chip ecosystem over the next two to three decades.
He shared the example of the U.S. to add color, highlighting that American investment in the chip sector has declined over the years and led to others such as Taiwan's TSMC and South Korea's Samsung Electronics rising to prominence in the industry. He likened the early days of the U.S. chip sector, when large investments propelled America as the dominant player in the industry, to Taiwan, as part of statements that indirectly warned that Taiwan could potentially lose its prominence today due to 'policy adjustments.'
The former executive shared that his American friends were often stunned when they heard about TSMC engineers who would rush to the factory in the middle of the night to resolve machinery issues. He believes that this hardwork is behind TSMC's success as a company, and it will serve it well heading into the future.
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