US supply chain is broken! ‘Impossible’: TSMC founder Morris Chang breaks silence on US dreams for onshoring chip supply chain

US supply chain is broken! ‘Impossible’: TSMC founder Morris Chang breaks silence on US dreams for onshoring chip supply chain, criticizes Intel CEO for ‘self-interest’ 美國供應鏈斷了！ “不可能”：台積電創始人張忠謀打破對美國本土芯片供應鏈夢想的沉默，批評英特爾首席執行官的“利己主義” By Liam Gibson, Taiwan News, Staff Writer 2021/10/28

TAIPEI (Taiwan News) — Morris Chang (張忠謀), founder of Taiwan Semiconductor Manufacturing Corporation (TSMC), says it will be impossible for the U.S. to rebuild a full chip supply chain in the country,

Chang said even if the country increased its current budget of US$52 billion (NT$1.45 trillion), which is far too small an amount, it will still not be able to reach this goal, according to a Nikkei report.

“If you want to reestablish a complete semiconductor supply chain in the U.S., you will not find it to be a possible task,” Chang said at a tech industry forum in Taipei on Tuesday (Oct. 26). “Even after you spend hundreds of billions of dollars, you will still find the supply chain to be incomplete, and you will find that it will be very high cost, much higher cost than what you currently have.”

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This is the first time Chang has publicly questioned Washington’s efforts to rebuild chip manufacturing. Chang is skeptical even though TSMC is installing an advanced chip foundry in the U.S. state of Arizona in response to Washington’s new policy.

Chang took aim at those who argue for onshoring out of self-interest like Intel CEO Pat Gelsinger, who Chang claims hopes to get funding for Intel from the US$52 billion subsidy package by stoking fears that Taiwan and South Korea are “unsafe.”

“In the past, companies in the U.S. or in Asia were growing and prospering thanks to globalization and free trade,” he said. Chang cited Thomas Friedman’s book “The World Is Flat” in which the commentator discusses the opportunities globalization creates for countries.

“Well, Tom, the world is not flat anymore,” he said. “This is going to be a challenge for the Asian semiconductor industry (and) global semiconductor industry, including Intel.”

Interestingly, Friedman may agree with the thrust of Morris’ argument. The famed columnist wrote an article for The New York Times that Taiwan News covered last week in which he argued TSMC’s success is based on its unique ability to build trust.

Friedman said that international cooperation is needed since the semiconductor industry is so complex that it is nearly impossible for one actor in the system to have the best in every category. To succeed, he posited, you need to cooperate with many trusted partners, just like TSMC does.

Despite the ongoing need for collaboration, though, many countries are drawn to reshoring manufacturing. Europe, Japan, and China are all offering government assistance to try to coax companies to keep chip production at home.