Bloomberg columnist Gao Canming believes that if the United States wants to develop a resilient and decentralized global supply chain, Taiwan is the best ally of the United States.

(Bloomberg file photo)

[Financial Channel/Comprehensive Report] Bloomberg columnist Gao Canming commented that no company knows how to build and expand chip manufacturing plants like TSMC, and Foxconn is unparalleled in managing complex electronic supply chains.

If the United States wants to develop a resilient and decentralized global supply chain, it needs to work with partners who have the experience, skills, and leadership to achieve this goal, especially in the semiconductor field. Taiwan is the United States' best ally.

U.S. friendly shore outsourcing should be included in Taiwan

Gao Canming posted a comment saying that for a country that is trying to rebuild alliances and unite a group of like-minded countries to deal with a common threat, the way the United States treats its friends is very interesting.

In the field of semiconductors, where the United States is prepared to provide billions of dollars in rewards, the most important partner is Taiwan, but the person responsible for building the world's most important semiconductor company does not seem to feel it.

Please read on...

The article said that when TSMC founder Zhang Zhongmou delivered a speech in Taipei on Thursday (16th), he agreed with the Trump and Biden administrations to limit China's access to advanced American chips, but raised objections to the "friendshoring" proposed by Washington.

Onshore outsourcing aims to shift the supply chain from China to a trusted country. Chang's problem is that it doesn't include Taiwan.

Zhang Zhongmou pointed out that Taiwan is known as the most dangerous place, which makes the United States think that it cannot completely rely on Taiwan. US Secretary of Commerce Raimondo once said this. This is a dilemma for Taiwan, and we must think about the reasons for it.

Gao Canming expressed his injustice for Taiwan. He said that neither Raimondo nor Yellen's considerations were correct, but what Zhang Zhongmou said was also true.

Although Washington does not explicitly exclude Taiwan, it does not include Taiwan in the list of allies for "friendly shore outsourcing", but requires Taiwan's semiconductor industry to set up factories in high-cost places.

The article bluntly stated that if you look at the entire supply chain, including chip design, software tools, materials, equipment, intellectual property and manufacturing, the United States occupies 39% of the global market. Zhang Zhongmou believes that Washington seems to be obsessed with only one link in this chain : Manufacturing, which is the area that gets most of the Wafer Act funding.

The article believes that this single-minded approach of dragging manufacturing back to the United States is confusing. The cost in the United States is twice that of Taiwan. TSMC still promises to invest 40 billion US dollars to build a factory in Arizona to support the policy of the United States, but Taipei is not in " on the list of allied countries for friendly onshore outsourcing.

Taiwan is the best ally of the United States to establish a chip supply chain

The article stated that perhaps Zhang Zhongmou's words neither represent Taiwan nor TSMC.

However, Zhang was able to listen to Taipei and Washington and meet them when the US Congressional delegation came to visit.

"So when Zhang speaks, the Biden administration better listen."

When it comes to technology, especially in the semiconductor industry, the United States has no better ally than Taiwan.

The article emphasized that Taiwan's semiconductor industry is the largest buyer of US materials, equipment and design tools, creating thousands of high-paying, cutting-edge American jobs.

It also provides services to US companies, enabling companies such as Nvidia (Huida), AMD (Super Micro), Qualcomm (Qualcomm), Broadcom (Broadcom) and Apple (Apple) to dominate their markets.

Today, Apple is now the largest company in the world, and Huida ranks eighth, thanks in large part to the technological edge that TSMC has given them.

Even if Intel is a potential competitor, and its CEO Kissinger has been vocal about shifting manufacturing operations out of Taiwan, TSMC is still a supplier to Intel.

That means Taiwan's business and political leaders need to get involved as the U.S. tries to bolster its chip manufacturing.

No company has figured out how to build and scale chip-making factories like TSMC, and Foxconn is unrivaled in managing complex electronics supply chains.

If the U.S. wants to be truly committed to developing resilient and decentralized global supply chains, the U.S. needs to work with partners who have the experience, skills, and leadership to make this happen, and the U.S. should start calling Taiwan an "ally."

Friending is the new buzzword in Washington, but the US doesn't seem to count Taiwan among them, @tculpan writes https://t.co/kZAo5kRXr5

— Bloomberg Opinion (@opinion) March 17, 2023

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