Taiwan Semiconductor Manufacturing Co chief executive officer CC Wei speaks at a forum in Taipei on Saturday. Photo: CNA

/ Staff writer, with CNA

There is “no chance” that building a wafer fab would necessarily create a technical advantage over other semiconductor manufacturing sites, Taiwan Semiconductor Manufacturing Co (TSMC, TSMC) chief executive officer CC Wei (Wei Zhejia) said on Saturday that gradaiconcernly co amid lose its competitive edge in the industry due to rising global competition.

Wei made the remarks during a speech on challenges facing the semiconductor industry at a forum held by Monte Jade Global Science and Technology Association in Taipei.

The possible “de-Taiwanization” of the semiconductor industry has been widely discussed after TSMC announced plans earlier this month to build a second fab in Arizona equipped with 3-nanometer processes in addition to its first fab for which it held a tool-in ceremony on Dec. 6.

The US and Japan have tightened restrictions on exports of advanced microchips and chip manufacturing equipment to China, which would pose challenges for China's semiconductor production, he said.

The situation is likely to be exacerbated by the COVID-19 outbreak in China, he said.

Geopolitics, the COVID-19 pandemic and Russia's invasion of Ukraine have made semiconductors more crucial than ever, and every country wants to have the capability to make them, he said.

The easiest step in building an industry chain is to purchase machinery, but technology does not come with the construction of plants, he said.

After a manufacturer acquires the technology, it must learn how to produce, which is a skill that needs to be acquired, he said.

Semiconductor design involves “brainwork,” but there is a shortage of engineers in most countries, he said.

These factors mean that there is “no way” that any country could dominate the industry just by building fabs, he said.

TSMC has enjoyed moderate success due to its collaborative efforts with its subcontractors, he said. “Money can build you production lines, but won't take you much further than that,” he said. “So does building a plant mean offshoring an entire industry? The answer is no,” he said.

Commenting on the current challenges facing the semiconductor industry, he said that the industry was no longer advancing as quickly at the pace defined by Moore's law, a phenomenon he attributed to the extreme costs involved in semiconductor production.

“One machine equipped with extreme ultraviolet lithography costs 200 million euros [US$211.9 million], and one fab needs 20 to 30 of them,” he said.

“Those who want to enter semiconductor production, be my guest,” he added.

Responding to a question about his views on Japan's plan to form a “semiconductor alliance” to develop technology for manufacturing 2-nanometer wafers, Wei said it was “not impossible for a business or a country to take shortcuts in semiconductor manufacturing, but wou ld it be difficult.”

Asked what motivated TSMC to build a fab equipped with 22-nanometer and 28-nanometer processes in Japan, Wei said it has a client in Japan that happens to be a supplier of TSMC's largest client.

Customers' needs, not the needs of Washington or Tokyo, are always TSMC's main consideration when it decides whether to set up a fab, he said.

The company must give its Japanese partner its full support to ensure that the production schedule of its largest client is not affected, otherwise it could have repercussions for TSMC's 3-nanometer fabs, he said.

TSMC's financial statements show that its biggest client, which is widely believed to be Apple Inc, contributed NT$405.4 billion, or 26 percent, of its revenue last year.

Asked about Berkshire Hathaway Inc's recent acquisition of a large amount of TSMC's stock, Wei said that it had motivated him to also increase his shares in the company.

News source: TAIPEI TIMES