Morris Chang, the founder of Taiwan Semiconductor Manufacturing Company (TSMC), has warned of potential threats to the company's dominance in the semiconductor industry due to geopolitical and economic challenges. Speaking on Monday, Chang highlighted the possibility of the industry turning into a strategic battleground, with Japan, particularly Kyushu, emerging as a key player due to its resources and work culture.
Chang emphasized that TSMC's current edge lies in its customer-supplier partnerships, Open Innovation Platform (OIP), economies of scale in manufacturing, accumulated experience, and the commitment of Taiwanese engineers. However, he cautioned that a shift towards national security at the expense of free trade could weaken TSMC's advantage over the next two to three decades.
Countries are increasingly interested in establishing their own semiconductor supply chains, with Singapore emerging as a viable choice despite resource limitations. Despite losing some manufacturing advantages after 1972, the US remains influential without needing substantial capital expenditure to regain its position. As per Chang's observations, Intel (NASDAQ:INTC) could pose a significant threat if it delivers excellent services, advanced technology, high yield rates, competitive pricing, and leverages its "Made in the US" status with White House backing.
On Sunday, Chang had dismissed the notion of Intel posing a substantial threat unless it bolsters technological leadership, yield rates, and competitive pricing. He asserted that even a prospering Intel Foundry Services would remain secondary to TSMC.
Chang also sees potential for Vietnam and India to become future semiconductor hubs. He expressed his aspiration of running a wafer fab in the US, referring to past experiences with WaferTech which encountered setbacks due to cultural differences between the US and Taiwan. He dismissed concerns about the Israeli-Palestinian conflict affecting Intel's Israel operations.
Chang underlined the receding trends of globalization and free trade in the semiconductor industry, accentuating TSMC's essential role in tech supply chains of nations like Japan and Germany due to national security implications. He urged TSMC to persist with its current strategy while enhancing investments in production capacity and process technologies.
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