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TSMC Doesn't Want to Make Its Chips in the US

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What a surprise: Taiwan Semiconductor Manufacturing Corp. (TSMC) reportedly doesn't want to shift production of its chips to the U.S., despite a request from the American government's apparent desire for semiconductors to be made on home territory so they're harder to compromise.

According to Bloomberg, TSMC chairman Mark Liu said at a tech forum in Hsinchu, Taiwan that the company "aims to resolve chip security issues by developing new technology to track where chips go and prevent them from being tampered with."

The company doesn't plan to shift production outside Taiwan, however, because making its products in the U.S. would cost too much. TSMC has established factories in its home country; it would effectively have to start from scratch in the U.S. Bloomberg reported that TSMC "did not hear directly from the Pentagon about U.S. production."

That's also a big ask for a company that, Digitimes said last month, reportedly already told its 7nm process customers they need to place their final orders for the entirety of 2020 because it can't make enough chips to keep up with demand.

Liu did say TSMC plans to establish a new R&D center in Hsinchu, though, where the company "will conduct research on critical semiconductor materials beyond silicon." The center's expected to accommodate 8,000 engineers devoted to the project.

The message was clear: TSMC's going to continue to invest in its home country rather than shifting production to the U.S. to assuage fears that its chips aren't secure enough for the U.S. government. Taiwan--it's right there in the name.

  • koblongata
    Americans very expensive, not a wise plan.
    Reply
  • setx
    Why any non-U.S. company would want to shift their production to U.S.? This looks like a horrible idea from any point of view.
    Reply
  • hannibal
    Yeah. When most American companies moves production to other countries because USA is too expensive...
    So company has to deside between: destroy the companys competativines by investing USA or fullfill the security demand of USA and invest in USA...
    Most companies just say to USA cowernment that They should just make their own hardware by USA cowernment own factories and leave busines to do what busines do. USA is starting to sound more like communist country and that is worrying... we have enough of communist countries allready. IMHO. If USA wants to get more production to its soil, it should make the production in the USA cheaper than anywhere else. That is more in line what USA is for. Free country that supports economy and free enterprice. Not by forsing and intimidating companies...
    Reply
  • rhettlivingston
    In this case, TSMC's technology is considerably ahead of that of US companies. I would think that they have the same concerns about sending it to the US that we would have over sending our technology to China. Of course, technology security wouldn't be a concern for a much older node, but then those are the ones already built and building a new, unneeded line just to satisfy government security concerns seems like a huge ask.
    Reply
  • sykozis
    hannibal said:
    Yeah. When most American companies moves production to other countries because USA is too expensive...
    So company has to deside between: destroy the companys competativines by investing USA or fullfill the security demand of USA and invest in USA...
    Most companies just say to USA cowernment that They should just make their own hardware by USA cowernment own factories and leave busines to do what busines do. USA is starting to sound more like communist country and that is worrying... we have enough of communist countries allready. IMHO. If USA wants to get more production to its soil, it should make the production in the USA cheaper than anywhere else. That is more in line what USA is for. Free country that supports economy and free enterprice. Not by forsing and intimidating companies...
    Part of the reason for the production cost difference is proximity to raw materials. The USA is at a huge disadvantage since most of the raw materials come from areas in or around China, Taiwan and India. The materials necessary for production would have to be shipped to the USA, increasing cost.
    Reply
  • pocketdrummer
    What we should be doing is funding US manufacturing altogether so we don't have to rely on Chinese companies to make our goods, regardless of the cost. Especially considering China's ongoing theft of intellectual property and cyber aggression, this would be a good move overall.
    Reply
  • bit_user
    setx said:
    Why any non-U.S. company would want to shift their production to U.S.? This looks like a horrible idea from any point of view.
    I guess that's why lots of foreign car companies have plants in the US.
    Reply
  • bit_user
    pocketdrummer said:
    What we should be doing is funding US manufacturing altogether so we don't have to rely on Chinese companies to make our goods, regardless of the cost. Especially considering China's ongoing theft of intellectual property and cyber aggression, this would be a good move overall.
    If the US had government-provided healthcare, like most developed nations, that would certainly reduce the cost of labor and make it more competitive.
    Reply
  • sam101200
    The educational system in the US is a joke. TSMC would NEVER be able to find the engineers it needs to work the factories in the US.
    Reply
  • cryoburner
    bit_user said:
    I guess that's why lots of foreign car companies have plants in the US.
    I think that's more a matter of the finished products being relatively expensive to ship into the North American market. Shipping a vehicle halfway around the world undoubtedly counters a lot of the savings gained from lower manufacturing costs, especially for countries that have relatively high manufacturing costs themselves. Something like a processor, on the other hand, shouldn't cost much to ship, so that doesn't really apply there.

    And even so, the auto industry comes to mind as one place where expensive labor costs have actually made it harder for US car companies to compete. See what happened to Detroit, once the worldwide leader in automobile manufacturing. Even when the big US automakers were struggling to compete with the overseas market, you see the labor unions repeatedly going on strike, wanting more pay and benefits, while ignoring the fact that the workers are already being paid pretty well for what they do. Now, a lot of manufacturing has moved out of the region, and Detroit's population has dropped to less than half of what it had been several decades prior. And you still see the unions staging strikes. A recent 40-day strike brought GM's manufacturing to a standstill for weeks, and reportedly cost them around $3 billion.
    Reply