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Taiwan must improve its chip technology to stay ahead, says TSMC’s Hou

Umito November 7, 2024

Taiwan should devote more resources to advancing chip technology and expanding its supply chain expertise to maintain its global leadership, an executive at its most valuable company said hours after the election of Donald Trump as President of the United States for the second time.

“We must accelerate research and development to secure our position as an indispensable member of the global semiconductor supply chain,” Cliff Hou, senior vice president of Taiwan Semiconductor Manufacturing Co., said in a speech delivered Thursday in his capacity as president of the Taiwan Semiconductor Industry Association. . “We are also working with the government to see if we can attract foreign partners to establish design and materials centers in Taiwan. »

The self-ruled island, home to the world’s largest contract chipmaker TSMC, lives with the constant threat of invasion by China, which considers it a separatist territory. The impending change in American leadership could alter its position in world affairs. While President Joe Biden has repeatedly expressed unequivocal support for Taiwan, Trump has said the island should pay the United States for its defense, calling Xi Jinping a “very good friend until Covid” in a interview with Bloomberg.

Hou, a 27-year veteran of TSMC who earned his doctorate in the United States, added that Taiwan must also aim to develop more expertise in equipment and materials, areas dominated by foreign companies. At the same time, the close relationship Taiwan and the United States have forged over the past decades will not be affected by the election outcome, the executive separately told reporters on the sidelines of his trade group’s event in Hsinchu.

Taiwanese companies have gained prominence thanks to advances in artificial intelligence, as beyond TSMC, a group of smaller suppliers have captured the lion’s share of orders for AI data center servers, power and cooling.

In October, Trump told podcast host Joe Rogan that Taiwan had taken away the semiconductor industry and jobs in the United States. “These microchip companies have stolen 95% of our business. It’s in Taiwan right now. They’re doing a great job, but that’s only because we have stupid politicians,” Trump said as part of a lengthy interview in which he also said he protected Taiwan from China during his first term as president.

The new Republican president then suggested he could leverage tariffs, not subsidies, to convince companies like TSMC to build and expand chip manufacturing facilities on American soil. Hou told reporters on Thursday that Taiwan’s chip industry had not received any notification of new tariffs.

TSMC, the go-to chipmaker for Apple Inc. and Nvidia Corp., has committed to spending more than $65 billion to create three chipmaking plants in Arizona, which its top executives say depends significant support from local and national governments. . TSMC always aims to keep its most advanced technology at home. Earlier on Thursday, Taiwan’s Economic Affairs Minister JW Kuo told reporters that local laws did not allow TSMC to transfer its most advanced technology overseas.