As political winds shift, top chipmaker TSMC looks beyond Taiwan : NPR

HSINCHU, Taiwan — Silicon Valley may be the heart of global technology, but its pace depends on a special kind of lifeblood — high-end microchips — many of which emanate from a science park on Taiwan’s west coast.

The park has been home to Taiwan Semiconductor Manufacturing Company, or TSMC, since the company was founded nearly four decades ago. It is from this premise that TSMC made itself indispensable to modern life; Its chips are in everything from cell phones to cars. According to some estimates, it production of Above 90% of the world’s most advanced chips.

But the math is changing for Taiwan’s largest and most profitable company, as the US-China rivalry intensifies and the chips are at stake Strategic for US national security Because of their applications in military technologies and artificial intelligence.

Beijing has also been I am dialing political Pressure on Taiwan; TSMC’s headquarters and most of its chip manufacturing infrastructure are located less than 100 miles from China, across the Taiwan Strait. The semiconductor industry has long been considered “Silicon Shield” which ensures the security of Taiwan,

These geopolitical forces are pressuring the company to look abroad – at least partly – for its future.

TSMC Chief Financial Officer Wendell Huang says it’s largely a question of meeting customer demand. “As a company, we can simply focus on our fundamentals: technology leadership, manufacturing excellence, and then customer trust. We don’t know politics. That’s between governments,” Huang told NPR in an October interview at the company’s headquarters.

But politics has shaped the landscape.

Currently, many of the company’s customers, including equipment suppliers, chip designers, and hardware companies such as Applied Materials and Qualcomm, have offices in science parks surrounding TSMC’s facilities in Taiwan. This allows them to remain close to their chip supplier.

But now, TSMC is taking steps to get closer to its customers. In 2020, TSMC announced that it planned to build fabs, or semiconductor fabrication plants, in Arizona, as pressure began to build in the United States to “reestablish” chipmaking, which had moved overseas, including Taiwan. The first fab there began high volume production late last year.

In Arizona, the company plans to have a total of six semiconductor fabs, two advanced packaging facilities (where chips are assembled into sets), and a research and development center. It is also expanding in Japan and Germany.

“Seventy percent of our revenue is from the US, and most of these customers want advanced technology,” Huang said. “Therefore, we are expanding advanced technology fabs in Arizona.”

The Biden administration’s CHIPS Act takes concrete steps to encourage chip production and keep high-end chips out of China’s hands. The Trump administration has continued rapid deployment in its second term. Carrot And blackjack Attempting to incorporate companies making chips in the United States. In September, the US government Took 10% stake in chip maker IntelAnd earlier this year chipmaker Nvidia agreed Give 15% of Chinese sales to America Of its advanced H20 chip.

Asked whether pressure from the Trump administration was a factor in TSMC’s expansion in Arizona, Huang said it was a function of demand.

“Let me put it this way, we’re also expanding, or accelerating, our Arizona fab,” he said. “We’re trying to upgrade to more advanced technologies faster. And it’s all because of customer preference, customer demand.”

The demand is for chips made in the United States – and it’s through the roof.

In mid-October, TSMC reported that its latest quarterly revenue was up 30% from the same period last year and profits had risen nearly 40%. A key driver was the company’s high-performance computing division – responsible for chips used in artificial intelligence.

“We see very positive or even strong demand for AI products,” Huang said. He said the company believes the “megatrend” will continue.

hundreds of billions Of dollar Investments in AI data centers have been made, and are estimated at trillions. Those data centers rely on chips manufactured by TSMC.

Huang said that TSMC’s business model is suitable for the current circumstances. TSMC pioneered the “pure play foundry” model of chip manufacturing. This means it does not design its own chips. Instead, companies like Apple, Sony and Nvidia – which have no chip-making capabilities – outsource production to TSMC.

Huang says that model, and the fact that TSMC is a technology leader, has built a reservoir of trust among the company’s more than 500 customers. And he said, this puts TSMC in a good position for any situation.

“The nice thing about a foundry in our business of 500 customers is that you cast a wide net. You don’t know who will be the winner in the next 10 years or 20 years,” he said. “But essentially you’re serving all of them, potential winners.”

Huang said TSMC’s moves abroad are about tapping new pools of talent and creating space for growth – access to tracts of open land, and water and electricity supplies.

“It’s a small island. Resources are limited. So we need to expand overseas,” Huang said.

However, as its business grows overseas, the company will continue to invest in Taiwan and keep some of its cutting-edge technology and research here.

“We will still have our home base in Taiwan,” he said.