TSMC’s U.S. Subsidies At Heart Of Controversial Commentary By U.S. & Taiwanese Academics

28.02.2024 - 06:01 / wccftech.com / Ramish Zafar

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

The United States' multi-billion dollar effort to re-shore advanced leading edge semiconductor fabrication inside its borders can harm Taiwan's indigenous chip industry, believe academics in a new research paper. The passage of the U.S. Creating Helpful Incentives to Produce Semiconductors (CHIPS0 Act earmarks billions of dollars in subsidies for firms such as the Taiwan Semiconductor Manufacturing Company (TSMC) to set up high-end chip manufacturing facilities inside America.

While TSMC's most advanced chip foundry in the U.S. will be its facility in Arizona, over the long term, as other players such as Samsung and Intel also speed up their advancements, the bill's aim can see leading-edge processes of the future, equivalent to the advantage enjoyed by today's technologies such as 2-nanometer, manufactured inside American foundries.

Related Story Intel CEO Confirms TSMC’s Process Nodes To Power Next-Gen CPUs: N3 For Arrow Lake & N3B For Lunar Lake

Specialization Is A Key Aspect Of Global Semiconductor Supply Chain Argue Academics From U.S. & Taiwan

Since it requires capital, expertise and licensing, the global semiconductor industry is dominated by a handful of players. On the design side of things, NVIDIA, Intel and AMD share the pie, while personal computing chips are primarily manufactured by Intel and TSMC. This means that the history of firms is the history of the industry.

TSMC's rise to become the world's most advanced chip manufacturing company was overseen by its founder, Morris Chang, and current CEO, C.C. Wei. Therefore, while Wei, who was leading the firm when it announced the new chip manufacturing facility in Phoenix, Arizona, remained cautiously optimistic at the time, Chang, who had retired, stayed true to his frank nature when commenting about his company's plans.

The TSMC founder had shared on multiple occasions that one of the biggest hurdles the firm would face while relocating to the U.S. would be finding the right workers to manage its chip-making machines. Academics from the U.S. and Taiwan reiterate these concerns in their commentary published in Project Syndicate.

They believe that "specialized skills are critical" when it comes to when it comes to chip manufacturing as there are more chip designers than manufacturers in the U.S. TSMC's stated reason for the delays in its Arizona facility has seen it comment on the need for flying workers from Taiwan to help install equipment at the site.

Most chip manufacturing in the U.S. has been carried out by Intel; however, the growth in smartphones and processors shipped by Apple, AMD and Qualcomm