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Uploaded: Oct 25, 202415 Comments

TSMC faces severe challenges as free trade falters, founder says

By Jane Lanhee Lee & Debby Wu / Bloomberg
26 Oct 2024, 03:07 pm

(Oct 26): Taiwan Semiconductor Manufacturing Co’s (TSMC) founder Morris Chang said the the company will soon face its “most severe” challenges in driving growth at a time that the US is controlling the flows of cutting-edge chips to China.

“TSMC is now truly a turf all major powers want to secure,” Chang said at a company event in Hsinchu on Saturday, amplifying a concept he first raised in 2019.

“Free trade of semiconductors, particularly the most advanced semiconductors, has died. In such an environment, our challenge lies in how to continue to drive growth.”

The go-to chipmaker for Apple Inc and Nvidia Corp, TSMC makes 99% of the world’s artificial intelligence (AI) accelerators.
The company is expected to book record revenue this year on robust AI demand and its share price has almost tripled in value since late 2022 following OpenAI’s launch of ChatGPT.

Still, the Taiwanese company is restricted from making the most powerful AI semiconductors for Chinese customers as the US works with allies including Japan and the Netherlands to restrict China’s access to cutting-edge chips and equipment.

China still accounts for more than 10% of TSMC’s revenue.

Chief executive officer C C Wei, meanwhile, said the company is fully confident it will increase its technology leadership, and reiterated that its new chipmaking plant in Arizona is “progressing well”. The executive said TSMC now plays a even more critical role in the global chip industry.
TSMC has been building new plants in Arizona, Japan, and Germany to mitigate concerns about growing tensions with China, which claims Taiwan as part of its own. The chipmaker has achieved early production yields at its first plant in Arizona that surpass similar factories back home, Bloomberg News has reported.

TSMC Faces Severe Challenges as Free Trade Falters, Founder Says