林保華

TSMC’s expansion win for Taiwan

    By Paul Lin 林保華
Taipei Times 240305

Taiwan Semiconductor Manufacturing Co (TSMC) held an opening ceremony for its first chip manufacturing fab in Kumamoto, Japan. It is owned by a joint venture, Japan Advanced Semiconductor Manufacturing Inc (JASM), of which TSMC is the controlling shareholder.

TSMC founder Morris Chang (張忠謀) attended the ceremony, saying that the JASM fab would “improve the resilience of the chip supply for Japan and for the world” and “start a renaissance of semiconductor manufacturing in Japan.”

Former Japanese prime minister Shinzo Abe once said: “A Taiwan emergency is a Japanese emergency, and therefore an emergency for the Japan-US alliance.”

The statement assured the Taiwanese by referring to the intimate relationship between Taiwan and Japan.

A Japanese emergency, therefore, should also be considered a Taiwanese emergency.

The decline of the semiconductor industry in Japan is a Japanese emergency, hence it is only natural that TSMC helps Japan reinvigorate its semiconductor manufacturing.

Considering the geopolitical risks that Taiwan is facing, it is also necessary for TSMC to provide Japan with the assistance it needs.

In 1955, when I moved to China from Indonesia, I brought with me some fountain pens manufactured in Japan. Those pens were low-quality products modeled after the US Parker pens.

In 1961, when my mother visited me in China, she brought with her a Sony transistor radio, which was slightly larger than the book Quotations from Chairman Mao Tse-tung.

I was quite excited and I realized that Japan had been making huge progress throughout those years.

In 1974, when my father came to visit me and helped me apply for permission to go abroad, he brought me a Panasonic shortwave transistor radio, which enabled me to listen to what was happening across the Taiwan Strait.

In 1970, before my school in Shanghai was turned into a factory, the entire city supported the development of vertical gradient freeze technology, a technique for growing semiconductors. The campaign came to an end without achieving much.

In 1979, when I was working in a Hong Kong factory, manufacturing toys such as remote-controlled cars, we were using semiconductors made in Taiwan.

It was then that I realized the significance of semiconductors, but at the time, the quality was not as good as it is today.

In the late 1980s, Japan’s thriving semiconductor manufacturing sector was disrupted by US government policy.

At this point, South Korea launched its own semiconductor industry and Taiwan started to catch up with other countries.

When Abe was Japanese prime minister, he vowed that he would revive the Japanese economy, which had stopped growing for more than two decades. Abe’s plan did not work out well.

However, after TSMC announced its investment in the US, Japan sincerely asked it to invest there as well, promising to provide all kinds of subsidies.

With their country to become a key TSMC partner, Japanese corporations became shareholders in the firm. As a result, TSMC invested in Japan faster than in the US. The JASM fab was completed after only 20 months and is expected start manufacturing by the end of the year.

Non-Japanese employees also are able to settle in swiftly.

The collaboration between TSMC and Japan has also revitalized the local economy in Kumamoto. It is said that a second and third fab are soon to be built.

Japanese media reported the opening ceremony with great interest and TSMC chairman Mark Liu (劉德音) and CEO C.C. Wei (魏哲家) were received by Japanese Prime Minister Fumio Kishida in person.

On the other hand, TSMC’s investment in the US was far from smooth.

The subsidies promised by former US president Donald Trump have not been received.

When TSMC intended to hire Taiwanese workers, US workers’ unions started to intervene.

Intel Corp’s CEO also expressed his discontent, demanding that the US government focus on US corporations rather than relying solely on TSMC.

Rules and regulations in the US have slowed the entire process. The project cannot be carried out as scheduled and has been postponed.

The TSMC fab in the US is only expected to start manufacturing next year. The plan for the second fab was, of course, postponed as well.

TSMC’s investment in the US is also driven by strategic necessity.

The US would ensure that everything is carried out, US Secretary of Commerce Gina Raimondo had said.

TSMC is Taiwan’s “silicon shield.”

When it travels abroad, it is the “shield” itself and human beings travel along with it.

More fabs must be built for the sake of the world, Morris Chang said.

Germany has also asked TSMC to invest there. It is said that India has asked the same.

These countries are trustworthy democracies. TSMC should not be worried about theft of intellectual property or losing its advanced technology.

The security of Taiwan has been repeatedly challenged.

It is necessary for TSMC to construct more fabs abroad, particularly in the democratic countries with whom Taiwan should maintain friendly relationships.

TSMC’s investment in foreign countries would also help others in the supply chain set up more factories.

TSMC could therefore make an enormous contribution, not only to many countries’ economies, but also to Taiwan’s economic diplomacy.

Paul Lin is a political commentator.

Translated by Emma Liu