TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacting Co. (TSMC) founder Morris Chang (張忠謀) told Nancy Pelosi that U.S. plans to spend its way into the semiconductor manufacturing industry were “incredibly naïve” during her August trip to Taiwan, according to reports.
According to Politico, Pelosi and Chang were at a luncheon at the Presidential Office when Chang began to voice doubts about the U.S. CHIPS and Science Act, and the planned multi-billion package of subsidies for semiconductor manufacturing.
“Fifty billion dollars – well, that’s a good start,” Chang said in front of an audience that included President Tsai Ing-wen (蔡英文), according to the Politico report. He then went on to press Pelosi with questions, including asking whether or not the U.S. plans represented a genuine commitment to building a globally competitive semiconductor industry, or simply an “impulsive” move to enter a lucrative global market.
Chang reportedly explained to Pelosi that establishing a viable semiconductor industry would require more than a one-off cash injection due to the rapid pace at which the industry evolves. He said that once an industry was established, simply obtaining the raw materials needed was an enormous task, and that the task of making the chips was almost “impossibly complicated.”
Chang reportedly then said that if the U.S. truly wanted to guarantee security of its semiconductor supply, it should continue to invest in Taiwan’s national security, as TSMC had “long perfected” what America was now trying to establish.
Pelosi was reportedly untroubled by the remarks, though acknowledged that other Taiwanese executives expressed reservations about the U.S. plan during the meeting. They specifically questioned whether or not the U.S. environmental and labor laws were sufficient to support such a complicated industry.
President Joe Biden talks about bringing chip manufacturing jobs to America after touring the upcoming TSMC facility in the U.S. in Dec. 2022. (AP photo)
Washington is also increasing incentives for Taiwan to expand its semiconductor manufacturing operations in the U.S., with TSMC announcing plans to up their investment in Arizona to US$40 billion (NT$1.2 trillion) in December 2022, with a further US$3.5 billion capital injection approved by the TSMC board on Tuesday (Feb. 14). TSMC is planning to have the first Phoenix fab (4nm) ready for commercial production in 2024, while it has also begun construction of a second 3nm fab which is slated to be finished in 2026.
The CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act was signed into law by U.S. President Joe Biden in 2022, allocating approximately US$52 billion of subsidies to semiconductor research and manufacturing. The increase in funding comes alongside sweeping U.S. sanctions and controls on the export of semiconductor technology to China, announced in October, which are already impacting Chinese companies.
Semiconductors are crucial for developing military hardware, and renewed U.S. interest in semiconductors is seen as part of a move to contain China’s military capabilities.
